EU biodiesel markets have remained an oasis of relative calm at the centre of an otherwise tempestuous day for global financial markets, with traders opting to sit out current volatility on either side of wide bid/offer spreads to wait for a clearer sense of direction to emerge.
Front month bean oil/gasoil spreads have held steady around the $150/t market for much of the day, keeping paper curves stable. Outright prices for benchmark US bean oil meanwhile continued to plunge towards levels of 26¢/lb not tested since late 2006, with gasoil prices breaking below $430/t for the first time since mid-2009.
European rapeseed prices have joined the price plunge which has dug deeply into soy and palm oil markets in recent days, although rapeseed levels started the selloff much stronger relative to historical lows given the run of recent downgrades to European and international crop forecasts. Rape oil/palm oil spreads finished Monday still in the mid-$320s/t, double the average $150/t intergrade spread seen last year.
Australia amplified the drumbeat of downbeat harvest reports on Friday with its estimate of a 2015/2016 canola harvest at just over 3mn t, down from over 3.4mn t in the 2014/21015 harvest year. Winter rainfalls have been average so far in the current crop year despite the El Nino weather system becoming firmly embedded. Australia remained the EU’s dominant canola supplier with 676,000t shipped in the first five months of this year, down from 1.26mn t in the year-ago period.