Cash basis on canola oil edged up last week, as soybean oil futures collapsed to multi-year lows below 48 cents per pound. As a result, LA canola oil values crossed below 70 cents per pound to levels not seen in more than two years.

Canola oil basis has been ticking higher recently, supported by rising U.S. vegetable oil demand, as well as concerns about delayed canola seed planting in Canada. The spread between canola oil in LA and RBD soybean oil in central Illinois tightened to 2.5 cents, closing in on the two-cent spread set in mid-April. The premium should continue to narrow, with the U.S. growing season underway. Early planting progress for the soybean crop has been ahead of the five-year average, suggesting farmers will finish planting on time and yields will reach trend or higher.

The price spread between RBD bean oil and canola oil has narrowed in the last year, particularly after the U.S. EPA officially approved canola oil as a renewable pathway under the…