Canola prices hit $800/tonne

Frost and hail have knocked canola yield potential around but grain traders say there are some high prices being offered.

Canola prices have been rising steadily for the past seven weeks.

And they are offering hope in what otherwise might be a lacklustre harvest in parts of Victoria and South Australia.

Prices are 20 per cent higher than the same time least year and are currently sitting at $800 a tonne at the port in Victoria – up more than $140 a tonne on last year.

Western Australia is leading the charge with quotes from Cargill Australia of $838 a tonne at Kwinana, Esperance and Albany.

Farmers welcome the price but say it’s bittersweet because they either don’t have canola after cutting it for hay following frost damage or yields have been slashed by the dry season.

Market Check chief executive Nick Crundall said prices were kicking on the European Canola Exchange and the current domestic price was a reflection of the world market.

While there has been a lot of concern about frost and hail and what the damage might mean for Australia’s yields Mr Crundall said the fundamentals of the current market were dictated by offshore pricing.

“In Victoria, there is an $800 a tonne or port equivalent price, which is an impressive number right on the doorstep of harvest,” he said.

Meanwhile, Canada’s harvest results were considered disappointing, and as a result, the market rallied in competing growing countries. There have also been reports about dry conditions impacting Russia’s winter crop production.

Chris Drum of Banyena. Picture: Zoe Phillips

Banyena farmer Chris Drum is three weeks away from harvesting canola and said he had been watching the prices closely.

“It is pleasant to see something heading in the right direction from a farmer’s point of view,” he said.

While $800 a tonne is considered high, Mr Drum said it was fair.

“I think yields will be slightly below average,” he said.

Mr Drum was hoping to see 1.5 tonnes/ha to 2 tonnes/ha when he direct heads his canola.

Grain Producers Australia president Barry Large, of Miling, Western Australia. Picture: Supplied

Barry Large farms at Miling in Western Australia and said to see the prices kick was always a good sign but many growers were reporting below average yields and the current values may only just offset a loss in production.

“I have heard of some good yields at Esperance of 2 tonnes/ha to 2.5 tonnes/ha,” he said.

However, in his area the average was closer to 1.2 tonnes/ha to 1.3 tonnes/ha.

Mr Large said the improvement in prices was bittersweet for some farmers who had left canola out of the rotation completely due to the dry start at sowing.