Dryness dents hopes of jump in Australian canola sowings

01.06.2017

Expectations of a jump in Australian canola seedings have been undermined by regional dryness - which has prompted chickpea farmers to sow seed as much as 8 inches deep to bring them into contact with moisture.

Rainfall in April and May, which witnesses the ramp-up in Australian crop sowings, has "largely disappointed", said Peter McMeekin, origination manager at grain merchant Nidera Australia.

Although the state of Victoria, and parts of Queensland, have seen "ideal" conditions, Western Australia, the top grain and canola growing state, has "had a very mixed season to date", with more areas receiving less than 2 inches of rain.

"This has led to a substantial change to planting intentions," with an expected rise in canola area  "snuffed out by the lack of timely rainfall in the key canola regions, with the planting window now closed" in the state.

Hopes dashed of area rise?

The impact will be that Western Australia canola sowings, which had been widely expected to drive a forecast increase in the country's plantings of the rapeseed variant this year, "will most likely be quite similar to last year", Mr McMeekin said.

Area lost to the oilseed will be switched back into the likes of barley and wheat, for which seedings in the state are also now expected to be largely flat year on year.

Separately, Rabobank too highlighted setbacks to Western Australia canola sowings from "dry conditions", but said that crop could yet be resown.

"Canola hectares will increase over the five-year average in Western Australia, but elsewhere are returning towards the five-year average," the bank said.

Tightening stocks

Australia's canola sowings had been expected by Abares, the country's official crop bureau, to jump 20% to 2.80m hectares this year, encouraged by relatively high returns prospects, with prices of the oilseed supported by a relatively tight global balance sheet.

The US Department of Agriculture has also forecast a 2.80m-hectare figure, as did the International Grains Council last week, although it flagged the threat to production from a dry long-term weather outlook.

"Productivity typically depends on autumn rains, with current forecasts pointing to below-normal precipitation and above-average temperatures," the IGC said.

Disappointment in Australian production would threaten a further drop in global canola/rapeseed inventories, which the IGC currently sees falling by 600,000 tonnes to 3.4m tonnes, their lowest in at least a decade.

This estimate also factors in a forecast of a 400,000-tonne increase to 18.8m tonnes in production in Canada, where seedings have been hampered by a wet spring.

'Clamour for chickpeas'

Mr McMeekin also noted the "less than optimistic long-range forecast" by Australia's Bureau of Meteorology, cutting hopes of reducing moisture deficits also seen in some areas of eastern and southern Australia.

New South Wales-based trader AgVantage said that local soil moisture moisture levels were "mostly patchy at best," meaning that "if we are to see a broad planting across our region, we'll need to see plenty more rain, otherwise, it could be a lean year.

"Whilst there is still time, the later the crop is planted, the greater the yield impact."

In rain-deprived areas, the emergence of a dry top soil, on top of a subsoil whose moisture levels had been replenished by heavy rains last year, has prompted chickpea farmers to sow deep in the hope of exploiting prices of the pulse which remain high.

Chickpea prices "delivered Narrabri still remain positive with bids at Aus$1,050 a tonne for current crop and 2017-18 crop bid around Aus$810," AgVantage said.

Mr McMeekin said: "For the second year running, all the talk in this part of the world is chickpeas.

"Many areas have reasonable subsoil moisture and some growers are sowing chickpeas as much as 200mm (8 inches) deep, instead of waiting for the next rain event."


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