Rapeseed oil spread with Soybean oil in Northwest Europe has narrowed to $20/mt while still holding its label as cheapest oil in Europe. Large canola exports (648kt) from Australia to Europe this january will keep the pressure on Rapeseed oil. Slow moving harvest in Brazil still holding up initial pressure on pricing but nevertheless the South American harvest will be well over 200 Million Mt coming off in the next 4 months just ahead of a normal size rapeseed harvest in Europe in Jun (5.95 mil hectares which is +6% y-o-y). Palm Olein in Europe is comming off fast on demand challenges with Malaysia Jan 1-20 exports down 18% since last Friday decision by WTO. Palm Olein at $1050/mt is making it a strong competitor to Soyoil. China is not picking up Beans in US which is only going to get worst as beans become widely available from Brazil over next 4 weeks. Flat price F0 is now under pressure in ARAG trading spot at $1182 showing $80/mt gross margin while RME trading at $1227/mt reflecting still a very healthy $106/mt gross margin. IRA/45z situation getting murkier in US and as predicted D4RINs rising - my expectations is that we go to $1 a gallon on D4RINs and really upset independent US refiners (Icahn) forging Trump Admin to start taking urgent measures to lower RINs.
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