Rain and prices bode well for canola growers

The odds of a record canola crop this season are improving. See how things are shaping up in Victoria, NSW and Western Australia.

Growers look set to produce a pile of canola this season as good rain lifts crop prospects.

Canola growers look set to benefit from a big crop, with good rain boosting harvest prospects and prices remaining relatively high.

Good rain in Western Australia, Victoria and NSW has increased the odds of the nation’s canola crop setting a new production record.

In its May forecast, the Australian Oilseeds Federation estimated the area sown to canola at a record 2.87 million hectares and production at 4.03 million tonnes, slightly less than last season’s record crop of 4.28 million tonnes.

But AOF executive director Nick Goddard said this week recent heavy rain in a number of states might see the federation increase its estimate of canola production when it reassessed the crop at the end of this month.

“Western Australia has had a lot of rain and Victoria is looking good, so it could be a bigger crop,” Mr Goddard said.

Prices are about $730 a tonne for genetically modified canola and $770 a tonne for non-GM oilseed on a delivered Melbourne basis.

Mr Goddard said US President Joe Biden’s environmental agenda pushing for crops being converted into biofuels was helping to maintain oilseed prices.

He said while the US was awash with soyabeans, demand for bio feedstocks was still resulting in Canadian canola, with its higher oil content, filling some of the biofuel void.

“Canola has been going from Canada into the US for a long time now, but that is more so now,” he said.

Mr Goddard said Covid-19 and other issues had disrupted world trade flows.

He said Canada and China were in a dispute, disrupting Chinese purchases of Canadian canola.

Late last month, Statistics Canada reported an 8.2 per cent increase in the area sown to canola this year, but it was not clear what impact the current heatwave hitting the prairie provinces was having on crop production.

Last week, grain growing regions had endured highly unusual temperatures of 40C for a whole week.

In Europe, Covid-19 had slowed down truck movements for transportation of goods last year, reducing the need for biofuels.

But Mr Goddard said the demand for Australian GM canola had increased since then.

European farmers were also facing environmental controls for growing canola, further increasing demand for canola imports.

“So we’re in a good position there,” he said.

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