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Americas Biodiesel Ethanol US

California LCFS rally resumes, PRIMA LCFS Index breaks back above $80

PRIMA’s California LCFS Index nudged up $2.50 on Monday from the previous trading session, as buyers proved willing to walk their bids to $80. The offer side was populated more thinly than the buy side, with a lone offer shown at $85.

In the wider US biofuels markets on Monday bean oil continued to stretch it’s premium to heating oil as high stock levels continued to weigh on mineral oil markets. Biodiesel prices softened to less than $2.20 despite perceived tightness in the market as sellers try to withstand blenders’ claim on 50% of any restored tax credit. Strong D4 RIN prices of over 53cents/gal are keeping blend margins hovering close to breakeven as BOHO spreads and biodiesel premiums expand relative to heating oil. D5/D6 spreads  plunged to 12cents/gal from 17cents/gal last week, while forecasts for heavy rains in Brazil into early November are buoying an already well supported domestic ethanol market and strangling arbitrage potential into the US advanced biofuel market.

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