REPORTS of exceptional oil levels are following the news of excellent canola yields in most parts of the nation’s cropping belt.
Australian Oilseeds Federation (AOF) executive officer Nick Goddard said while the crop was unlikely to challenge yield records it was likely to be significantly up on last year and oil levels are also a pleasing feature.
“There will be big increases in Victoria and South Australia leading the way, we would expect something over 3.5 million tonnes, which is a big jump from the previous season which was impacted by drought in south-eastern Australia.”
In good news for growers, Mr Goddard said other factors, such as the quality package and prices were also holding up, making canola one of farmers’ best performing crops this season.
“The oil component is going really well, there are reports of loads coming in at over 50pc oil, which is fantastic.”
He cautioned against the industry expecting this as an average but said it did suggest an overall strong oil profile.
“We know we generally hear about the good loads and not those that are on the lower end of the scale, but we would still expect it to be a solid year oil wise.”
Mr Goddard added that the crop’s fatty acid profile was also good.
“We have a good breakdown of oils, which again, like oil levels themselves, often happens when you get a good season agronomically.”
Brad Knight, Geo Commodities, said the high oil levels were a handy boost to gross margins.
“If you’ve got 50pc oil you would be looking at around $60 a tonne extra based on current values of $520/t or so.”
“It’s a very handy bonus.”
Mr Knight said it was the best overall oil profile he had seen in south-eastern Australia.
“I’ve seen some zones go well and others miss out, but this is by far the most consistent result from what I am hearing.”
He said yields had also been very strong.
“It is a big year for canola.”
NSW farmer Dan Cooper, Caragabal, said oil levels in his area had been exceptional.
“The yields were very good, but people have been commenting on the oil in particular.”
“The open pollinated varieties were probably the standard setters on oil, the hybrids may have put a bit more into yield.”
In spite of the abundance of canola domestically it is unlikely prices will crash in the immediate future.
Mr Goddard said international market factors continued to be positive for canola prices.
“Palm oil continues to strengthen and while they are not directly substitutable, that is a help for canola prices, while soybeans also remain strong.”