California’s Low Carbon Fuel Standard (LCFS) credit volume reached its fourth highest weekly level of the year a week after transactions hit their lowest level

Weekly credit volume of 401,628 was up 908 percent from last week but 11 percent below the same weekly period last year. The average weekly credit volume for the year increased from 184,379 to 192,735. Average weekly transactions increased to 22. This week’s reporting marked the end of the second quarter. Second quarter credit volume closed 25 percent below first quarter volume and 19 percent below the same quarterly volume last year.

Trading activity was heaviest on Monday with 18 percent of the transactions taking place.  The highest average daily price was $195, which also occurred on Monday. The price range credits traded in narrowed from $150 – $197 last week to $174 – $197 in this week’s report. The weighted-average credit price was $190.61, down slightly from $191.87. At the top of the range 1,000 credits traded and 10,000 traded at the bottom of the range. 61 percent of the credits traded at a price of $190 or above, 4 percent traded below 180.  There were only two trades recorded below $182.

The Jacobsen continues to expect credit volume to rise relative to last year. An additional 284 million gallons of biodiesel and renewable diesel are forecast to be produced during 2019. There were 11.18 million LCFS program credits generated during 2018 and there are 13.7 million forecast for 2019.

CARB only includes transfers that are completed in the given week. Transfers for future dates, proposed and still pending confirmation, are excluded.  CARB’s weekly report excluded 6 transfer of 5,436 credits. CARB will exclude transfers that trade at, or near, zero in price.

Biodiesel Market

Flint Hills Resources has decided to idle its 50-million gallon per year biodiesel plant in Beatrice, Nebraska, this month.  It is do remain idled indefinitely.  The plant’s primary feedstocks were corn oil and varied greases.  According to Flint Hills, low soybean oil prices, the primary feedstock for many of their competitors, left their plant at a competitive disadvantage a situation they feel will persist for some time.

The bean oil/heating oil spread edged higher heading into the Holiday.  Fear surrounding the global economic slowdown eased, allowing oil prices to rise.  Heating oil pushed back up to $1.90 while soybean oil rallied 36 ticks, more than offsetting yesterday’s move lower.  The stronger rise in soybean oil relative to heating oil forced the BOHO spread higher by 1.4 cents.

INDUSTRY-RELATED NEWS

June 20 (AgPro)  President Trump Takes Action On Farmer RIN Waiver Concerns –  When President Trump visited an Iowa ethanol plant in June, farmers attending the event took the opportunity to help President Trump understand how Renewable Identification Number (RIN) hardship waivers are undermining the Renewable Fuel Standard (RFS). It appears he may have heard them. READ MORE

May 28 (Bloomberg Environment Magazine) EPA Ready to Scrap Biofuel Market Reform in Bid to Boost Ethanol – The EPA is poised to jettison proposed trading restrictions on a $5.2 billion market for biofuel compliance credits, casting aside changes sought by independent refiners complaining of hoarding and wild price swings. READ MORE

May 28 (Biofuels Intl)  US Representatives introduce Renewable Fuel Standard Integrity Act 2019   – Last week, Chairman of the US House Committee on Agriculture, Collin Peterson, together with Representatives Dusty Johnson, Dave Loebsack, Rodney Davis and Roger Marshall introduced the bipartisan Renewable Fuel Standard Integrity Act of 2019. READ MORE

I always look forward to hearing from our customers.  Please feel free to contact me with any questions, comments, or suggestions you may have.  If you buy, sell, or trade any of our products, I would like to hear from you.  Bob Lane at [email protected]  847-549-3640.