There'll be record amounts of canola fields painting the landscape bright yellow during Australia's winter cropping season, as farmers look to capitalise on the record prices for the commodity due to overseas demand.
Seed companies have been reporting a strong run on canola seed to take advantage of the high prices on offer.
Wayne Phillips runs through the status of Australian canola in the FlowNews24 podcast player below - the article continues further below:
The FlowNews24 agriculture report on Friday noted that Western Australian farmers have reportedly planted a record 1.492 million hectares of canola this year, an estimated 10-15% more than other years.
Analysts have been predicting a 10 per cent increase in national plantings but in New South Wales the plantings were down due to a drier than usual April, with western NSW hanging on to seeds while eastern NSW plantings expected to plant soon.
South Australian farmers have also been looking forward to their first opportunity to plant genetically-modified canola after the 16-year moratorium on GM crops was lifted by the Marshall Liberal government.
Canola demand is high at present due to China being hungry for the commodity and poor cropping conditions in Canada and Europe. Canada, a big exporter of canola, recently had to import some to meet domestic demand due to low domestic production.
The other major demand driver for canola are government environmental policies driving biofuels, or biodiesel in the case of canola, with the USA and Indonesia some of the major protagonists. Canola-derived biofuels are considered better for the climate than corn oil or cooking oil.
One Rabobank analyst predicted recently that the USA needs to plant 12 million hectares more to meet future biofuel demand, the equivalent of half of Australia's crop.
In April canola prices went above $700 a tonne delivered to port, with new crop Melbourne/Geelong bits reaching a record high of $730 per tonne in late April.
The longer-term average price for Australian canola has been around $500 per tonne.
Farmers who can grow irrigated canola are best placed to capitalise on the price surge. as those farmers can plant canola with confidence under great fixed contract prices on offer to those farmers that can guarantee delivery.