US bean oil starts this morning at fresh seven year lows after yesterday breaching the 29¢/lb barrier. The drop has kept the spread to gasoil trading in the $150s/t after gasoil flatlined at the tail end of Thursday’s range, keeping value on the front month ICE contract at $477/t this morning.
EU biodiesel markets have yet to fully adjust to the drop inbean oil/gasoil spreads, which is keeping front end production margins healthy before a backwardated swaps curve slashes producer profitability further forward. Despite the weak lead from gasoil, strong July import data from India helped to drag palm oil prices away from recent lows.
This may be an indication that low prices are starting to create fresh demand, similar to the demand gains seen in international motor fuel markets in recent months as end-users adjustto a lower price environment. Total Indian edible oil imports gained 45.8% MoM in July, hitting just shy of 1.5mn t. Palm oil imports rose 34% MoM to 976,000t.