The rising bean oil/heating oil (BOHO) spread has been lending to higher RIN prices over the past couple weeks. This has improved B100 values and raised margins. Soybean oil prices have also moved higher but were unable to keep pace with the increase in biodiesel prices.
Margins are not where they need to be to incentivize further production on their own. This has led several producers to slow production during January. In February, additional plants will perform scheduled maintenance, which could help margins as supply slips lower.
As a side note, used cooking oil, which generally trades at a discount to soybean oil, was recently trading at a premium. Higher feedstock costs could take a bite out margins if there is not a corresponding rise in RIN values to offset the cost.
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