Bumper Canola and Wheat Crops

The year 2020 might not have brought good news in terms of COVID-19, but the weather has been more favourable. The La Niña conditions have led to generally wetter than average conditions in Eastern Australia and the Riverina area, which has in turn resulted in bumper canola and wheat harvests.

The Australian Oilseeds Federation has reported a significantly improved canola crop in NSW. Both NSW and Vic were forecast to produce 50 per cent above the five-year average (26 per cent above the 10-year average), with ample domestic supplies, and up to 800,000 tonnes potentially available for export.

In terms of wheat, the Australian Wheat Board noted that November/December 2020 were the busiest in recent years with over seven million tonnes of grain received into the bulk handling system on the east coast alone coinciding with the New South Wales harvest close to 75% completed.

This volume far surpassed last year which as at the end of November was closer to 500,000 tonnes received.

Further, that barley and wheat yields have hovered around 4-5t/ha or better whilst the large proportion of canola has exceeded 2t/ha and approaching 3t/ha and even higher with a favourable oil profile to further compliment these yields.

From a gross margin perspective, strong cash at silo pricing is ensuring growers can achieve close to $1000 per hectare across nearly all commodities with canola nudging $1500/hectare and better where the oil profile has allowed.

While this is all very welcome news, the challenge for farmers and industry alike for the coming months is how we physically shift the vast amounts of grain that have been produced across the wheat belt.

There is ample export demand into traditional and non-traditional destinations to allow us to do this, however, time may be working against us.

With a sizeable inverse in the northern hemisphere markets, most notably the Black Sea region, the challenge is to price these commodities and get them to market prior to the new crop supply in mid next year.

Export supply chains have been and will continue to be stretched during this period.

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