AUSTRALIAN canola producers are on the cusp of a $4.5 billion windfall if current yield estimates and pricing can remain in place until harvest.
Just when growers thought there was little room for price upside concerns regarding the drought-hit Canadian crop have seen another ratchet up in values, with prices smashing through the $900 a tonne mark.
Port prices for new crop canola now are as high as $915/t at WA ports, $877/t in Adelaide and $875/t on the east coast.
Should the prices remain in place at harvest not only would they be the highest on record for harvest cash prices but would be so by a whopping 25 per cent or more.
This positive price outlook is matched by similarly bullish sentiments regarding this year's Australian canola production.
With crops hitting full flower in many regions optimism is growing that well above average national production will be achieved, with some analysts quietly suggesting a record year is a distinct possibility.
"We're still doing all the calculations for our next crop update but on current yield potential if there is nothing major that goes wrong over the next couple of months we would see no reason we couldn't have a 5 million tonne crop," Australian Oilseeds Federation executive officer Nick Goddard.
"A lot of the crops across the country are in very good condition and there has been a big plant in reaction to the high prices," Mr Goddard said.
He said growers stood to generate monster gross margins if there were big yields to go with the high prices.
"We are certainly right up the very, very top of the tree when it comes to prices," Mr Goddard said.
Commonwealth Bank commodity analyst Tobin Gorey said the northern hemisphere season had played into Australia's hands, with a continuation of the weather woes in Canada, the world's largest canola exporter, a big driver in the most recent gains.
"Canada's Prairie had a hot, dry weekend, with the additional prospect of high winds this week no doubt aided the rally," Mr Gorey said.
Along with the production woes in Canada Mr Goddard said government policies were favourable for canola at present.
"Policy decisions like the US biofuel mandate and a similar push for biodiesel in the EU are both very supportive for pricing," he said.
However, Mr Gorey cautioned Australian growers not to expect prices to continue to rally indefinitely.
"The question though is whether that weather will materially lower Prairie crop estimates," he said.
"We suspect not, so the run higher in prices is likely to peter out."
The season thus far has gone virtually exactly to script for croppers who took the punt and planted more canola this year.
"People are really excited about the prospects of canola this year, overall crop prospects look really solid in most key growing regions," said GrainGrowers chairman Brett Hosking.
"Over the years we've thought of canola as a bit riskier than cereals but that dynamic changes when prices are at $800/t plus, now up to $900/t in places, the old rule of thumb of needing double the price of wheat is well and truly in canola's favour," Mr Hosking said.
With the price signals in place at sowing time, farmers were prepared to increase their canola hectares where possible, with availability of seed the major constraint.
Eyre Peninsula research agronomist Andrew Ware, EPAG Research, said farmers in the traditionally strong canola producing region had gone hard with canola where possible but said it was far from wall plantings.
"We definitely saw all the seed available snapped up, even old two year old supplies of less popular varieties farmers were willing to have a crack at just to get some extra hectares in where their rotation allowed it," Mr Ware said.
"In the south of the region, where there is a strong history of a wheat-canola rotation farmers have planted a lot of canola, as you would expect, but even further north there were still good plantings."
Mr Ware said there were nervous moments earlier in the year with a late break, but said things had improved with a relatively wet winter.
"We're looking quite reasonable now, albeit a few weeks behind where we normally are," he said.
The global oilseeds renaissance has attracted interest from outside the agriculture sector.
Financial services business Credit Suisse has issued an 'outperform' rating on US agribusiness Bunge, primarily on the St Louis-based company's exposure to the oilseeds sector and the good crushing margins on offer.
However, Mr Goddard said while prospects looked good for the medium-term, farmers needed to be cautious about thinking this was the start of an ongoing canola boom.
"We'll see great prices this year and even next year I don't know if world stocks will rebound fully even with good crops so there is a reasonable outlook there but further out, you have to be a bit cautious," he said.
"It is less likely to be the start of a supercycle and more likely just the top of a normal supply and demand driven price cycle."
"There is very strong fundamental demand for canola oil but equally there is a lot of demand that comes from government policies that could be changed."