The month of November in New South Wales is typically met with temperatures warming up, little to no rainfall and harvest gathering momentum across the state.
Fast forward to the end of November 2021, and not only did the Bureau of Meteorology (BoM) officially declare a La Nina system, but we also had huge flooding across many parts of the state.
This has slowed harvest to a "crawl" during the past fortnight.
Catchments in the Namoi and Lachlan Valleys are still counting the toll from the past week, and there was more rain expected in the upper Namoi catchment at the end of this week.
As this water makes its way along the river systems, there are also fears of damaging flooding in the western townships of Coonamble, Warren and Wee Waa - which are bracing for significant damage in low-lying areas.
Many of these NSW cropping regions are seen as shining lights.
So, local grain prices have reacted accordingly.
The spread from milling quality grades to feed grades has opened as wide as $150-200 per tonne in northern and central NSW.
This is a deliberate move as the market tries to secure the quality wheat that has already been harvested.
The news of a La Nina and downgrades to crops in eastern Australia is making waves in the global context.
This is because the world's buyers have been looking towards Australia as a provider of milling quality wheat during the next 12 months.
With vast quantities of wheat surely downgraded as a result of the recent weather, we have not only seen local prices react, but global futures prices have risen well above US800 cents per bushel - or $420/t.
There has been continued market reaction to the dry conditions being experienced throughout USA crop growing regions, as well as severe flooding in Canada.
It is safe to assume there will be plenty of volatility going forward as the market digests the weather concerns for each growing region around the world.
One variable that could have an impact is the potential spread of the new COVID variant, Omicron.
There has already been an increase in the number of European countries forced back into lockdown.
If we add into the mix a more transmissible COVID variant, the chances of further lockdowns and a slowdown in travel could affect global economic recovery.
The demand for fuels and canola is closely linked through biodiesel blends that are mandated in many European countries.
So, if lockdowns are extended during the Christmas period and there is less demand for fuel, there could be a reaction in the canola market globally - which would affect the Australian producer.
The flip side to this, of course, is our own quality concerns.
Many reports are already surfacing about lower test weights and significant sprouting in canola.
This means we may have less export quality canola available than the market anticipated.
The supply and demand balance are perfectly illustrated using this scenario.
Potentially there will be less demand for Australian canola if European lockdowns occur, balanced by the potential for reduced supply of high quality canola due to the effects of weather.
As is always the case with quality issues, it is best to get on the front foot when the issues are known.
