Biodiesel: Forward premiums crash amid vegoils selloff

Quantum Commodity Intelligence - Spot physical markets for VVO biodiesel Thursday were down slightly but paper premiums crashed as much as 33% from the prior session amid a selloff on vegoils.

Physical barge trading activity was a little less hectic than in some recent sessions, with just four deals for FAME 0 at $210/mt done, down $16.75/mt from the prior day, and a single UCOME trade at $850/mt, down $85/mt.

RME was assessed $16.75/mt lower at $764/mt, reflecting an unchanged differential versus FAME 0.

However, July FAME 0 paper premiums were marked just shy of $71.75/mt lower at $152/mt, while August dropped $59.75/mt to $165/mt, Q3 $64/mt to $174.75/mt and Q4 $75/mt to $285.25/mt.

RME and UCOME paper dropped by even greater magnitudes and differentials versus FAME 0 weakened.

The falls mostly tracked weaker BO-GO and RO-GO spreads, as vegoils fell amid a cocktail of recession fears, slightly weaker crude oil and amplified fears of biofuel demand cuts after reports that some members of the G7 group will push for mandate adjustments at their meeting this weekend.