US boho factor reaches highest level since April 26 on Thursday


The relationship between feedstock soybean oil and blendstock heating oil, which the biodiesel industry uses to gauge costs and margins, on Thursday rose to its highest level in six months, S&P Global Platts data showed.

The "boho" factor, as the relationship is also called, rose 1.72 cents to 112.87 cents/gal. That is the highest level since April 26, when it was 116.89 cents/gal.

A higher boho factor signals more expensive biodiesel production costs and poorer blending economics, hampering margins. The boho factor is calculated by multiplying the cost of a pound of soybean oil by 7.37 -- which is the industry standard for the yield for soy methyl ester biodiesel -- minus the cost of a gallon of blendstock heating oil.

Thursday's increase came as soybean oil futures rose 12 points, settling at 35.10 cents/gal. This was the second consecutive session of increases and holds just above the 30-day average of 34.427 cents/gal, Platts data showed. Falling front-month heating oil futures pushed the boho up as well, as the November NYMEX ultra-low sulfur diesel contract fell 0.01 cents on Thursday to $1.4582/gal. This was well below its 30-day average of $1.5569/gal.


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