2023 exports of UCO through Sep from China are slightly higher than last year taking some of the slack exhibited by Europe. German Diesel consumption through Aug is down 4% from last year at 22.1 Mil MT with gasoline flat Vs last year yet we can see that Biofuel blending overall is up 2.7% and Biodiesel is up 2.9% showing that demand for Biofuels maybe stronger than what the market is currently reflecting. UCOME is trading at +$440 above ICE Gasoil in Northwest European ports and showing $1305/mt flat price FOB ARA showing now a stronger backwardation as it rebounded nearly 8% just today in gasoil alone. Meanwhile winter biodiesel main feedstock Rapeseed oil curve is now finally flattening out as ample rains with more in forecast have brought navigation back to normal. RME Gross margin improved dramatically this week to nearly $300/mt in the front but with a crop of nearly 20 Mil MT, we should see continued pressure on RSO pricing. Same situation happening on Mississippi River as we are now 85% completed with Soybean harvest and we should see further weakness in soyoil as crushers still enjoying great crushing margins (1.58) as meal prices leading. With both Gasoil and HO stronger due to geopolitical events, it is no surprise that biodiesel screen crush margin is up 11% today.
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