The euro rose to a 32-month high against the dollar at $1.203 Tuesday, adding support to the biodiesel market and countering falling feedstocks.
With a stronger euro cutting production margins, that had been wider owing to lower vegoils, some support was added to the biodiesel market.
"The euro is providing some of the upward pressure in biodiesel. If this wasn't the case, it would fall steeply on antidumping duty sentiment," a source said.
With feedstocks weakening, and increasing anticipation antidumping duties on material from Argentina and Indonesia may be lifted or at least eased on September 7, the rising euro has furnished some support to the biodiesel markets on the prompt.
If duties are cut, imports would be expected to be higher into Europe, both for palm-derived biodiesel from Indonesia and soybean-derived biodiesel from Argentina.
Alongside this, lower vegoils along the curve coupled with much reduced demand expected for FAME 0, left paper values falling Tuesday.
"Rapeseed oil is following the global trend for vegoils -- the market is very bearish on this," said a source Tuesday.
As a result, the backwardation in the FAME 0 market has been steepening, as market demand is expected to move from FAME 0 to RME due to its preferred cold weather properties, as Europe heads towards autumn.
Despite both the RME and FAME 0 premiums edging upwards Tuesday on the stronger euro, the markets have both moved downward from their near seven-month highs last Wednesday.
S&P Global Platts assessed FAME 0 at $468/mt FOB ARA Tuesday, down $15/mt on the week, and RME at $500/mt FOB ARA, down $3/mt on the week. Both rose $0.25 from Monday, despite weakening along the curve in response to bearish vegoils.
