SYDNEY, Australia – With its canola harvest two-thirds over, Australia is headed for a bigger than expected crop and expects buyers to return as prices ease.
The Canola Association of Australia increased its forecast for the current crop to 1.49 million tonnes from its last forecast of 1.447 million.
Based on a national survey of grower groups, the increased forecast follows a series of crop upgrades from the original estimate of 1.375 million tonnes, because of late season rain, and compares with production of 1.681 million tonnes in 2000.
Bob Colton of the canola association said the latest increase was mainly the result of good harvest progress.
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Crop forecast figures were raised for South Australia, to 210,000 tonnes from 195,000 tonnes. Western Australia’s forecast increased to 360,000 tonnes from 342,000 tonnes, and New South Wales rose to 550,000 tonnes from 540,000 tonnes.
“South Australia has had an excellent season all the way along,” he said.
“They claim it’s the best year they’ve ever had.”
In Western Australia the harvest showed slightly better yields than expected.
Crops in southern NSW and northern Victoria states were disappointing, due mainly to a dry season and some disease and frost damage. But northern NSW, Victoria and South Australia had all done well.
“It’s not too bad overall … quite a respectable figure.”
Colton said a drop in Australian canola prices to $321 Cdn a tonne, as Winnipeg Commodity Exchange canola futures eased, returned the oilseed to a more competitive zone.
Prices had been as high as $365 in recent months and at a more recent range of $345 to $332.
High canola prices relative to soybeans had been blocking Australian canola export sales.
A reduction was needed to attract buyers back into the market, he said.
“We think now that that might start to happen,” he said, referring mainly to international buyers such as China.
Prices could weaken more, although current levels of around $325 are still good historically, he said.
The downside is a limited by unfilled consumption demand in Europe and Japan and by limited canola supplies.
