The soybean oil/heating oil spread (BOHO) fell this week and Renewable Information Number (RINs) prices slowly followed. The BOHO measures the profitability for producing biodiesel from soybean oil. When the spread narrows, it often indicates improved production economics. RIN values tend to decline when the need to offset higher production subsides.
Over the past week, the BOHO spread has narrowed by 14% while RIN prices have declined by 1%, which is not in lockstep with the BOHO.
Soybean oil prices have been decreasing aggressively. Volatility in the soybean complex is high and likely to remain so until the USDA’s quarterly grain stocks report and the planted acreage survey is released on Friday June 28.
The grains market appears to be bracing for a larger soybean crop than originally anticipated from the March Perspective Plantings report. The original estimate was for 86.5 million acres, a 3% increase from 2023.
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