President Trump’s U.S.-first biofuel policy could be bullish for Canadian canola demand, according to the president of Chicago-based Ag Resource Company.
As Dan Basse explains, the United States imported about two million tonnes of B100 biodiesel from Argentina last year, offering a dollar/gallon tax credit for it.
“A lot of those imports probably won’t get the tax issue this year as reconciliation bills come forward. That would mean we’re going to a producer tax credit in the U.S. That would really bump U.S. soybean oil demand up by six to eight hundred million pounds, and in tow, could bring Canadian canola oil into the United States for domestic use,” he says. “That would be a big change.”
“We don’t expect it until maybe mid-summer, but it’s something every Canadian canola producer needs to be watching closely.”
Another six to eight hundred million pounds would make a significant dent in the USDA’s projected soybean oil ending stocks estimate of roughly 1.7 billion pounds.
“We have to supplant it with some veg oils from somewhere else. Canada’s right across the border, so I can’t think of a better vegetable oil to bring in,” says Basse.
Source : Albertacanola