Large front-end supplies in energy, much like what we have in oilseeds, are spooking markets today. Energy is down one full standard deviation, with ICE Gasoil now trading at $666/mt. Just one month ago (week 37), we attempted to test $622/mt. Since Soybean oil has been equally weak, BOGO is still trading at $250/mt, while FAME0 in Northwest Europe still prints at +432 all the way through Q3 next year - this is unsustainable. Soyoil remains the weakest soft oil in Europe, with the spread to RSO widening again today to $35/mt premium to soyoil. SFO prices are spiking in NWE to $1351/mt as large supplies of Russian SFO are now unable to make their way to the EU, distorting international markets and will probably have to be marketed at discounts in spring 2025. RME gross margin is now $119/mt, which is still ample enough to keep the market well supplied. UCOME market remains well bid nearby at +685/mt over ICE gasoil, showing the largest gross margin at $327/mt, but with HVO cl2&4 being offered at +920/mt, it remains a solid GHG savings value. On the US side, with strong D4 RINs (0.69) and LCFS (69/mt), production in excess of RVOs is assured, but political pressure on UCO/Tallow imports will continue into the new year as no one wants to stick their neck out in this election campaign.
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