Canola prices have kicked after a lull

Canola prices are trending above $600/tonne again after a market dip earlier this month. See what has caused the price increase.

Canola has experienced a market reprieve with prices climbing up to $632 a tonne.

It’s welcome news for farmers, and the timing coincides with the beginning of the winter cropping program.

Canola prices dropped below the benchmark of $600/tonne at the start of the month and hovered around $580/tonne for a couple of weeks.

Grain traders are citing more activity on the global market for the price increase but warn there isn’t likely to be a flurry of sales domestically despite the improvement.

Peters Commodities grain trader Peter Gerhardy of southern NSW said the improvement in prices and overnight rainfall of up to 25mm in places was good news for cropping farmers.

“There has been a bit of a rally on canola in the past few days,” he said.

Mr Gerhardy tipped that prices had improved by about $20 a tonne in the past week to 10 days.

He said any improvement for the canola price was needed because it was such an important staple in many of the winter cropping programs.

In addition, some handy rain fell in the area, which might be enough to prompt some early grazing varieties to be planted.

“I’m hearing of around 25mm of rain in parts of southern NSW,” he said.

Wagga farmer, Alan Brown. Picture: Brad Newman

“We are not talking about big rain by any means, but it will help with some early sowing opportunities,” he said.

According to the Bureau of Meteorology, Shepparton received 20mm overnight, Nhill 16mm, Horsham 16mm, Strathbogie 24mm and Bairnsdale 27mm.

Mecardo agricultural commodity analyst Angus Brown said canola had been rallying lately, with the GM canola market trending up $55/tonne from the lows of late February, where it fell to $707/tonne.

He said the slight price rise wouldn’t be likely to prompt selling activity on the domestic market.

Alan Brown of Wagga Wagga, southern NSW, said growers were encouraged to see prices for canola rise because even at $600/tonne, it was still often considered a marginal crop to grow.

He said in southern NSW and Victoria, canola was an important break crop and was integral to cropping rotations.

“Canola is so important in our rotations because it breaks the disease cycle,” he said.

He said the 25mm of rain that fell in Wagga Wagga overnight would assist farmers who were planning to put some early-sown grazing crops in.

The Australian Bureau of Agricultural and Resource Economics and Sciences’ March crop report showed canola production for 2023-24 was forecast to fall by 31 per cent to 5.7 million tonnes but would remain above the 10-year average.