In step with a sell-off in soybean oil futures at midweek, Los Angeles canola oil cash prices ended down but above 91 cents per pound on Wednesday. The market gradually moved higher in June due to rising U.S. vegetable oil demand, as well as concerns surrounding delayed canola seed planting in Canada. By the end of that month, basis has climbed more than five cents since April to 21 cents. Coupled with sharply higher prices for bean oil futures, LA canola oil prices jumped above 90 cents per pound after slipping to two-year lows in the spring.

The spread between refined soybean oil and canola oil narrowed sharply in the late fall of 2022 just before the U.S. EPA approved an eligibility pathway for canola/rapeseed oil to generate Renewable Identification Numbers (RINs) in the production of renewable diesel, renewable jet fuel, renewable naphtha and renewable heating oil. Prior to this, canola oil could only generate RINs in the production of biodiesel.

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