The bean oil/heating oil (BOHO) spread rallied 23% this week compared to the week prior. A rising BOHO signals a more challenging economic environment for biodiesel and renewable diesel production.
Rising soybean oil prices increased the price of feedstock producers this week. The Chicago Board of Trade (CBOT) showed the price of crude soybean oil futures closing at 41.47 cents per pound on Friday August 23. This was a 4% rise in soybean oil for the week and the highest price since August 12.
Ultra-low sulfur diesel (ULSD) prices edged 1% lower week on week, providing additional upward pressure on the BOHO spread. ULSD prices closed at $2.30 per gallon and have been trending lower with crude oil.
Renewable identification numbers (RINs) are the currency of the US Renewable Fuel Standard (RFS) and are used to incentivize biofuel production. RIN values generally rise or fall with the movement of the BOHO spread.
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11.21.2024
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