Oilseed demand lifts acreage

By Nicholas Robertson

4th May, 2022 

 

Significant increases to crop input prices hasn’t slowed the efforts to plant this year’s winter crop as almost the entire east coast has been gifted a well-timed and wide-spread autumn break. From southern Queensland down to southwest Victoria, growers are sowing into healthy moisture reserves with crop germination following as quick as can be hoped for. After years of drought, it is heartening to see east coast farmers shaping up for potentially a third successive productive winter cropping season. Adding to confidence levels is the predictions for the La Nina weather pattern to continue into winter.

 

Canola has surpassed $1,000 per tonne delivered upcountry and with ideal moisture through April it is expected that plenty will go in the ground. NSW growers alone could increase canola acreage by 10-20% according to some reports. Much of the growth is expected to be in northern NSW where rotations could allow substitution of chickpeas for canola. Gross margins for chickpeas aren’t stacking up and while canola is deemed riskier with a dry finish, ground moisture is ample, and strong global oilseed demand is sending the message to increase acres.  

 

To the naked eye, a big canola plant does look likely, however there have been a few issues for growers to navigate. Canola seed availability has been a hot topic amongst resellers with the wet harvest downgrading much of last years seed crop. As a supplier of canola seed for our own specialty canola program reports of seed shortages and missed orders have been more common than usual. Fortunately, despite last minute crop rotation changes AWB have been able to accommodate growers with Hybrid canola seed for a significant 2022 program.

 

There has been plenty of discussion about the impact on markets of the ongoing Black Sea conflict, however other market movers are beginning to emerge. Higher commodity prices usually encourage farmers domestically and internationally to increase acreage of the high-priced commodities and it’s not only Australian farmers seeing high oilseed pricing. Farmers throughout the America’s have or are looking to increase acreage in soybeans and sunflowers however StatsCan reported last week that rapeseed acreage is potentially lower in Canada.

 

With the ongoing Black Sea conflict, energy markets continue to be volatile through much of Europe and many consumers are noticing this in the household cost of living. Germany itself appears to be struggling with finding alternatives to Russian energy supplies. There has been talk about changing the biofuels mandate in Germany to combat high energy prices for consumers meaning less canola may find its way into energy market and thus loosening up the supply and demand.

 

Canola provided one of the highlights of the 2021/22 season for many New South Wales growers. While there is still plenty to do before this seasons end, the markets and mother nature are seemingly lining up to provide a season that could rival the last one.