Biodiesel Market: January 10th, 2020

Biodiesel Market: January 10th, 2020

Falling crude oil and heating oil values helped to push the bean oil/heating oil (BOHO) spread higher this week.  Heating oil prices dropped 6.5 percent to $1.92 per gallon.  Prices closed the week 13 cents below last Friday’s settlement at $2.06 per gallon.  Despite the decline, heating oil values are three percent higher relative to a year ago. Soybean oil pricing also dropped, which limited some of the impact on the BOHO spread.  Soybean oil declined two percent to 34.35 cents per pound for March delivery at the Chicago Board of Trade.  Soybean oil prices are up 21 percent compared to a year ago.  The BOHO spread advanced 15 percent this week, settling at just under 60 cents per gallon.  The BOHO spread is up 186 percent relative to last year and at its highest level since November 16, 2017.

Biodiesel RINs reacted to the advancing BOHO spread.  B19 RINs climbed 15 percent to 47 cents, reaching their highest level since mid-December.  Despite this week’s gain, the value of the B19 RIN is 6.5 percent below where it was a year ago.  Ethanol RINs gained one to two cents this week, but the EPA’s use of small refinery exemptions leaves ethanol RIN values 40 percent below pricing seen a year ago.  California’s LCFS credit and Oregon’s CFP credit remain well supported and near recent highs.  The California credit is holding at $206, unchanged from last week and eight percent above pricing from a year earlier.  Oregon’s credit edged a dollar higher this week and is holding at $152.50.

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