• Bloomberg reported that Cofco International has agreed to sell its Chicago grain terminal to agricultural cooperative, Growmark Inc. The deal comes after Cofco offloaded its Milwaukee facility in Wisconsin last year. It also follows the company’s decision to relocate from downtown Chicago to the suburbs due to high costs and crime.

• Bloomberg also quoted Brazil as saying that the US has cleared the way for its shipments of used cooking oil in a move that may further erode profits for American soybean producers and crushers as they face increased competition from imported oils. The US has recognised international certification for Brazil’s compliance with some sanitary and technical standards. To meet US requirements, Brazil will issue certification of traceability, identity and origin of used cooking oil.

• Reuters quoted USDA as saying that soybean rust fungus was found in the “remnants” of a soybean field in southern Texas. With the discovery, the fungus has been identified in 21 counties in 4 states this year. Last year, it was found in 274 counties in 15 states, double the total in 2005. Currently, the USDA forecasts US soybean production at 4,450mil bushels in 2024E/2025F vs. 4,165mil bushels in 2023/2024E.

• According to a new Transport & Environment study, China will soon run out of waste oil as demand from Europe and US outstrips supply. Stratas Advisors’ research looked at the collection capacity of the world’s leading UCO (used cooking oil) producers and found that China has already exported more than half of its UCO to be used in European and US cars and trucks. This is before airlines are set to triple demand for UCO by 2030F to meet “sustainable” aviation targets. Europe burns through 130,000 barrels of UCO a day – 8x more than it collects.

• Biofuels International reported that US production of hydrogenated vegetable oil (HVO) has noticeably picked up pace over the recent years. The EIA (Energy Information Agency) said that 19.9mil tonnes of biodiesel including HVO were produced in the US in 2023. Biodiesel production at 7.3mil tonnes accounted for only 37% of total production. In contrast, production of HVO gained significantly in importance, accounting for 63% of the share or 12.6mil tonnes.

• The Telegraph said that Lufthansa will add a surcharge of up to £61 per flight to cover the costs of using greener fuels from next year onwards. The charges will affect flights from EU, UK, Switzerland and Norway, starting from 85p, depending on the route. Under EU rules, airlines must use a blend of at least 2% of sustainable aviation fuel from 2025F onwards, rising to 70% by 2050F. The move comes after Air France and KLM announced a surcharge of up to £10 on their flights last year.

Source: AmInvest Research - 1 Jul 2024