Gasoil and vegetable oils moved lower in lockstep on Tuesday, keeping BOGO spreads broadly stable this morning. Commodities remain under pressure after China’s second currency devaluation in as many days kept the focus on potentially weaker demand for relatively more expensive dollar-denominated commodities in the world’s main commodity import motor.
Agricultural markets will look to tonight’s USDA WASDE report for their next major steer. US expectations point to a downgrade for US production and end stocks after poor summer weather. USDA’s FAS earlier tipped China to buy a record 74mn t of soybeans this year, rising to 77.5mn t next year, with strong Chinese pork prices the main demand driver.
Despite the stablility in vegoil/mineral oil spreads spot ARA biodiesel premiums continued to firm on Tuesday, highlighting a tight market with little availability of PME blendstock and little prospect of import re-supply as the mid-September window before the switch to winter grade specs narrows.