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Russia: NWE biodiesel prices rise sharply on Russia's grain exports ban

https://www.chemnet.com   Aug 09,2010
Biodiesel prices in NWE rose sharply Thursday afternoon and continue to be supported Friday morning after feedstock prices rallied after Russia announced a temporary ban to grain exports.


The ban, which covers wheat, barley, rye and corn as well as wheat and rye flour, led CBOT wheat prices to explode in the Chicago Board of Trade.


The commodity posted their best price performance since 1963, higher by 42.3%, Morgan Stanley said in a research report.


A spillover effect was immediately seen in the soybean and corn markets.


Soybean oil is a feedstock for the production of biodiesel.


Both summer and winter grades were affected, with FAME 0 premiums to gasoil being assessed Thursday at $333.50/mt, up $12/mt from Wednesday's value, and FAME minus 10 premiums assessed $402.25/mt up at $32.75/mt over gasoil.


Rapeseed oil-based biodiesel, or RME, also saw a jump, with the premiums seen at around the $415/mt levels on Thursday.


In early trading Friday, premiums continued to be supported, with FAME 0 August loading heard in a range of $330-350/mt over gasoil and RME in a $420-460/mt over gasoil range.


There were talks of an RME deal being concluded at a premium of $420/mt over gasoil for August loading, but this could not be confirmed.


Russia's grain exports ban is set to take place from August 15 to December 31 and is the result of extremely dry weather conditions, which have affected the country's crops and spread wild fires in certain regions.


Russia's grain production was Wednesday downgraded to 70-75 million mt from 85 million mt in early July.
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