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U.S. Soyoil, Fuel Credits Jump on Duties for Argentina Biodiesel Imports

By Michael Hirtzer

CHICAGO, Aug 23 (Reuters) - U.S. soyoil prices jumped 1.8 percent on Wednesday while biomass-based diesel fuel credits also gained on expectations for increased demand for domestic supplies after Washington imposed duties on Argentine and Indonesian biodiesel imports.

Argentine biofuel producers threatened to halt exports to the United States after the U.S. Commerce Department's decision on Tuesday to slap countervailing duties of up to 64.17 percent on the imports from the South American country.

The Indonesian trade minister said he planned to log an objection against duties as high as 68.28 percent, which were imposed after the U.S. National Biodiesel Board claimed foreign supplies were harming U.S. biodiesel makers.

Imports, mostly from Argentina, made up nearly half of U.S. biodiesel consumption of 2 billion gallons (7.57 billion liters) in 2016, according to government data.

If the Argentine export ban materializes, then that would likely boost U.S. prices, encouraging increased U.S. biofuel production.

Soyoil futures at the Chicago Board of Trade rallied when global trading opened late on Tuesday. Prices for the vegetable oil were up 0.59 cents at 34.65 cents per pound by early afternoon, below their earlier roughly four-week high of 35.01 cents per pound.

The price for a biomass-based D4 RIN diesel fuel credit reached $1.20, the highest level in 2017, before trimming gains to $1.15, two traders said. Prior to the duties’ announcement on Tuesday, the credits traded at $1.11.

"Everybody has raised their prices and they are waiting to get a little more clarification," said a U.S. cash soyoil trader.

CBOT's oilshare, which measures soyoil's value as part of the soybean crush, surged to the highest levels since December as traders bought soyoil futures and sold soymeal .

Prices for September soymeal, a protein-rich animal feed, fell to a 16-month low of $292.00 per ton.

"It's a complete erosion of the protein (feed value)," Futures International analyst Matt Pierce said of the soymeal declines.



(Reporting by Michael Hirtzer; Editing by W Simon)

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