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Americas Biodiesel

Vegoil/gasoil spreads steady as soybean cancellations raise demand flags

An unspectacular day’s trade in mineral and vegetable oil markets has stabilised September bean oil/gasoil spreads in the $180s/t this morning. Hefty Chinese bean oil cancellations totalling close to half a million tons have kept the soybean market focused on demand side fundamentals, although signs of a faltering Chinese economy have already helped massage the recent fall in mineral oil prices.

The almost linear depreciation in the Argentinian Peso relative to the US dollar since January meanwhile is helping Argentinian biodiesel exporters in their mission to source US demand, with well over 120,000t lined up for nearby shipment northwards. US blenders are taking advantage of low prices to book tonnes and eligibility towards the blenders’ credit while it remains in their favour. The inflow will substitute a portion of domestic US biodiesel blending away from home-grown soybean oil, which has already seen its market share into the biodiesel pool eaten away by competing animal fats and other grades of vegetable oil.

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