05.17.2024
Uncertainty with 45z tax credit may affect Q1 2025 biofuel contracts
The expiring BTC provides a one dollar per gallon blenders credit up front with an additional 30 to 40 cents of credit to producers on the backend. Crimson...
The bean oil/heating oil (BOHO) spread fell approximately seven cents to a monthly low as soybean oil prices dropped more rapidly than ULSD heating oil futures. Falling feedstock prices are lowering production costs and there appears to be plenty of feedstock available. Chatter in the market suggests some producers may have purchased more feedstock/soybean oil than needed for production.
Soybean oil futures closed at 46.02 cents per pound, their lowest level in over one month. SBO is down 6% this week and 29% year to date. The BOHO spread is 12% lower so far this week and down 29% year to date.
Production margins are mostly unchanged to slightly higher as the BOHO declined more than RIN values today. The B24 RIN closed at 49 cents, its lowest level in a month. The B24 RIN is down 6% in value this week and has lost 37% since the beginning of the year.
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