Almost one standard deviation move higher on futures up to 48.75 but settling at 48.60 - this is nearly up $66/mt. Expected retaliation by China on Indonesia textile tariffs centered on fate of Palm oil exports from Indonesia. BOPO was up nearly 20% on 3rd month to +$206.47. There was little reaction in cash markets in South America as FOB Paranagua immediately neutralized the move as cash premium went from -300 to -550. Whereas in Europe soy oil prices reacted by rallying up $20/mt across the board with only structure changing a bit. Rapeseed oil structure is now in a contango through May-Jul 2025 while Soyoil is flat through end of the year much like Sunflower oil which is now again the cheapest oil in NWE. In Biodiesel we note that margins narrowed a bit on this sudden soyoil rally but don't think it is sustainable unless major action is taken by China on Palm. One should consider that Sep needs for China are already logistically mostly filled and therefore lower seasonal sourcing of Palm oil in Q4 could exacerbated by any tariff on Indonesian Palm which am sure Malaysia will happily fill. The more important news remains the strength in Gasoil/Heating oil which is lifting Biodiesel prices and demand especially in US although flat structure in Europe gasoil through sep-Oct is not too encouraging. Heating oil feels a bit better yet neither chart is convincing.
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