Canola's tough grind

Canola prices are sitting at $480 a tonne at Newcastle and Port Kembla ports, grinding down $40/t since April/May.

Despite some flooding of Canadian crops, AWB central NSW representative Sam Reichstein, Orange, said he didn’t think it was likely to drive demand.

“Some paddocks were flooded but the yield increase in other crops that received the rain but weren’t flooded will make up for that loss,” he said.

“Canada is still sitting on plenty of stock from last year’s crop – they have a lot of stock left to export.”

European growers are currently harvesting a record crop, according to Mr Reichstein.

“This means import demand will be pretty slim or nil.”

With Asia, Europe and Middle Eastern markets typically the largest importers of Australian canola, Mr Reichstein said the market would come down to domestic support.

“There wasn’t much canola planted in northern NSW but Central West NSW and southern NSW have fared pretty well, which should more than make up for it.”

Unless there was significant frost damage or other pest or disease issues, Mr Reichstein said canola prices would suffer.

However, he said it was hard to forecast how low prices could fall.

“Growers may hold on until it hits a price spike but we expect the price to grind lower over the course of harvest as growers try to get some cash flow going.”

Australian Oilseeds Federation executive director Nick Goddard said canola prices had followed the downward trend of soybeans.

“There is a very large soybean crop in North and South America so canola is caught up in that,” Mr Goddard said.

The reality, he said, was that canola prices had returned to the long-term average price.

“It’s brought it back to about $430/t to $450/t for old crop.”

Canola prices haven’t fallen as low as soybeans, however.

“With the Canadian canola crop there is a bit of uncertainty on the volume of it since it got some heavy rain on it, which is why (canola) hasn’t fallen as much as soybeans.”

This put Australian canola in good stead for the Chinese market, according to Mr Goddard.

“We were able to capitalise well at the start of the year when Canada had logistical issues,” he said.

“We were able to develop a good export program to China.”

Despite concerns about decreased canola planting across NSW, Mr Goddard said there was an estimated 550,000 hectares of canola planted across the State for the 2014-15 season, down by only 50,000ha on last year’s final figure.

Early flowering in canola has been a concern for growers across the State but the worst may be yet to come, said MSM Milling co-director Pete Mac Smith, Manildra.

“The real concern is always the frosts as we move into the second half of September,” he said.

“Northern NSW has been expanding in canola growth over the past few years but that won’t be the case this year.”

DESPITE problems with some ryegrass resistance across the property, the canola crops on Andrew Hermiston’s Deniliquin property have fared well.

Mr Hermiston farms “East Wandook”, where he sowed 70 hectares of RoundUp Ready and TT Crusher canola on April 10.

Ryegrass resistance has been a major problem in the past few years, he said.

“Some of the crops have been write-offs – total disasters,” he said.

To counter this, Mr Hermiston said he had more than doubled the number of Merino ewes he was running and turned much of his property into pasture.

“That’s why the amount of cropping has gone down so much – we had too much ryegrass seed in the grain and they couldn’t accept it.”

The canola crops had fared well this season however, despite some early flowering.

“Where we planted the RoundUp Ready canola, we pre-irrigated then sowed but the moisture didn’t strike as well as it should have,” he said.

“That crop isn’t flowering but there is another paddock we sowed dry then watered up and it is flowering.”

Mr Hermiston said he hoped to average the same yield as last year’s crop.

“Last year we got about the 3.2 tonnes a hectare, direct harvested.”