The price spread for soybean oil/heating oil (BOHO) futures improved in the week to Monday October 28, moving back above $1 per gallon, when losses in heating oil prices outpaced those in soybean oil prices.
The BOHO price spread was up by more than 8% week on week to $1.0091 per gallon on Monday.
In Chicago, the December soyoil futures contract settled at $0.4269 per lb on Monday, down by $0.0146 per lb, 3.3%, from $0.4415 per lb on October 25. Energy prices plunged, and this worked to drive the sell-off in the soybean oil market to start the week.
Since October 21, the front-month soybean oil futures contract has decreased by 0.7%, while spot ultra-low-sulfur diesel (ULSD) futures were down by 2.5%.
Soybean oil is the most heavily used feedstock in the production of biomass-based diesel (BBD), and the BOHO spread serves as a guidepost when measuring the profitability of producing biodiesel from soybean oil.
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