Gasoil has ploughed below its early 2015 lows as China’s stockmarket has taken centre stage yet again, turning the spotlight on faltering economic growth in the world’s second largest economy and largest consumer of imported commodities.
US bean oil has fallen particularly hard in oil’s wake, plunging to around 26.50 ¢/lb in out of hours trading today after finishing Friday’s session still well above 27¢/lb. Front month rapeseed futures last week continued to defy the multi-year lows seen in other oilseeds, reflecting the relatively poor harvest potentials for European rapeseed and canola in major exporting countries.
The widening spread between rapeseed and bean and palm oil products will accelerate European end-users efforts to seek cheaper alternatives to domestic vegetable oil. EU 28 palm oil imports were running only slightly over 2014 levels in Jan-May this year, amid average $140/t price spreads between palm oil and rapeseed oil. Collapsing palm oil prices have already driven the front month intergrade spread this morning to levels above $330/t.