Tue 15Jan2019: ICE gasoil down $7.75/mt to $559.75 as Brexit vote putting pressure on EU markets yet crude is higher this morning in Asia. Heat crack still a staggering $27.31/Brl while 3:2:1 remains at $13.71. In US Biodiesel production margin remain terrible for independent producers that are not shipping to California and govt shut down is making trading RINs very difficult as trade lacks EMS&EIA data. RINs traded lower at 50cpg. Meanwhile in EU, RED RME spot still at exceedingly high levels of +558 while Q1 showing +450 and RED FAME still at +260 spot and showing slight contango for q1 at +265. On the SouthAm side, it looks like we are growing a very large Soy crop despite inventories and Brazilian Beans remain cheapest in the world and with no El Nino this winter, it is hard to get bullish oilseeds with exception of Rapeseed. POGO currently down the curve only at -20/MT while BOGO at +75… almost a $100/mt spread but who dares sell BOGO which in my view is more sensitive to energy at this moment. On the Forex front not much news as negotiations btw US/China continuing and CNH stable at 6.75 while Indian Rupee still at 70.74.

Thu 10Jan2019: ICE gasoil bounces back to $565 as crude up almost 20% in the last 10 trading sessions and weekly has barely reached over its 100 day SMA and RSI is just above 42 – with strong mid distillate basis in Asia, I don’t see why we cannot reach back over $600 before end of month and perhaps reach over 50daySMA. In US 3:2:1 weekly cracks still strong only because of distillate at $26.77/Brl. WTI still showing $8.5 discount to Brent despite strong US exports, again a reflection of strong demand and not only US. On the US Biodiesel front margins have bounced back but still production margins quite a bit negative as RINs not doing the work while BOHO got 13centspergallon weaker because of HO move – I think we will see BO move higher imminently. Only thing working in US is California LCFS credit that remain strong with $191/mt trading yesterday. Meanwhile in Europe RME values still in backwardation with spot showing +485 while Feb is discounted $100. RED FAME values now showing +280 for Q2 while Q3 at +285 still leaving PME arb open to EU. On the currency front CNH at 6.85 while INR is at 70.38 – not much changed despite weaker USD mostly against Yen.

Tue 17Dec2018: ICE gasoil takes a tumble together with crude to $532.25 on continued weakness in energy although RSI is ready for a bounce and Brent structure returned to backwardation today despite an ugly trading day. 3:2:1 crack bounced higher to $16.20/brl while HO crack still showing super high level of $27.55/brl. Biodiesel margin in US quite terrible with BOHO now at 35-37cpg meaning that only sales to California with LCFS make any sense. News on the BTC remains scant as administration and Congress trying to leave town this week without shutting down the government. Meanwhile in Europe RME remains in backwardation with spot asking for +705 while Q1 showing +420. RED FAME is shown at +225 for next year season (starts Apr1) and RED PME trading $25/mt lower. News of China buying Beans overnight, together with lower tariffs on cars would indicate that things are progressing well on the China front. Both side eager to do a trade deal to avert any further economic slowdown and would not be surprised that we see something before early Jan. Tmrw is Fed interest rate day and USD index still sitting at a one year high of 97.028.