Our
first estimates for the 2007/08 canola crop are for a 1.39
million tonne crop. However, this is dependent on a wide spread
seasonal break in late April/early May.
The forecast for NSW is for a significant
recovery on last year, although this is still well below
production levels of the late 1990s. However, this is dependent
on an early break to the season and a substantial quantity of
rain is needed by early May to see the estimated area planted.
Reflecting the mood across eastern Australia, growers would like
to grow canola, but are unlikely to take the risk if it is a
late season. While prices are good, growers are feeling the
impact of the poor season in 2006/07, lack of subsoil
moisture and high fertilizer prices. This will see growers be
risk adverse and see reduced levels of dry sowing. Across the
state, sub soil moisture levels are virtually nonexistent except
where there has been storm rain.
While Victorian growers are also waiting for
opening rain, given the winter dominant rainfall pattern, this
may not need to be as substantive as NSW to kick-start planting.
April has been dry, with periods of high temperatures. Growers
are looking to put canola into the rotation, which should see
canola area maintained at levels of previous years. Like NSW,
rotation and prices are supporting factors, but lack of cashflow
and high costs are limiting this. Rain is needed by mid May to
see estimated area planted realised. There may be some upside if
there is good rain by mid May.
Parts of South Australia such as the Eyre
Peninsula and mid North have received good rain in March,
although this has been followed by high temperatures in April.
There is good interest in canola in the lower rainfall regions,
with growers looking to plant in April. The south east is more
uncertain following crop failures last season. Overall,
estimates have been left in line with previous years.
The positive price outlook for canola prices
based on forward contracts is supportive of canola plantings in
Western Australia. Sub soil moisture is reasonable along the
south coast and very good immediately around
Esperance. It is expected that planting will commence shortly
along the South coast, while the rest of the state is
relatively dry and waiting for opening rains. Northern and
Eastern growers who experienced a hard time last year are likely
to plant less canola in favour of cereals, while Western, Great
Southern and South Coast growers may
plant similar or more hectares compared to last year mainly due
to the price. Overall, area is estimated at slightly below (down
2.5%) on last year however an early break could see upside to
this estimate.
Soybeans 2006/07
Estimates
for the soybean crop have been revised down slightly, reflecting
the continuing dry conditions.
