The headline number is that canola production is forecast to be 59% higher than last year at 3.7mmt. A huge crop, but unlike wheat and barley which claimed a 2nd place posting, canola is not quite as close to the records. This season canola will be the fifth-largest crop.
In a similar fashion to the other commodities, the benign weather in the eastern states since September has resulted in large increases in NSW (+23%), VIC (+12%) and SA (+14%).
The west did not fare as well, with a 3% decline. Forecasts for the WA crop are set at 1.4mmt, which is in line with the expectations of GIWA at 1.37mmt.
In our discussions with farmers and traders around the country, the oil levels this year are quite healthy, providing a bonus for producers on what are already strong prices.
The canola market has bounded up during the last half of 2020, due to offshore movements in the oilseed sector. The pricing levels in Port Kembla and Geelong are lower than last year. Still, it is important to note that previous season prices were under the influence of drought.
This year price and volume are favouring the grower. I would expect that growers will be fast sellers of canola at these levels.