AUSTRALIAN canola production is expected to crack through the 5.5 million tonne mark for a second consecutive year.
The Australian Oilseeds Federation (AOF) put out its August crop report last week, with a production estimate of 5.506m tonnes, down on last year's record 6.3m tonnes but well above the five year average of 3.7m tonnes.
AOF executive officer Nick Goddard said Australia had planted a record area of canola this season, at 3.425 million hectares, reflecting the good subsoil moisture levels prior to planting and the buoyant pricing outlook.
However, he said the rain had been too much of a good thing in parts, causing issues with excess moisture.
"Above-average rainfall has continued across large parts of NSW in the four months to June, impacting planting and establishment in some areas," Mr Goddard said.
This is reflected in the numbers, with NSW predicted to have a 53,000 tonne drop in production in spite of a 180,000ha rise in planted area.
Mr Goddard said there had been problems, especially through the Central West, with poor establishment, while in the Riverina he said around 20 per cent of crops were waterlogged.
He said even in areas where crops were well established the wet conditions meant poor trafficability which has limited in-crop nitrogen applications which will have a negative impact on end of season yields.
Elsewhere across the country, production is expected to drop slightly across all the canola producing states on the back of lower average yields, with all states reporting a gain in planted area.
In the west, WA crops are well advanced after a warm June, but most farmers are looking for further late winter and spring rain to achieve optimum yields.
Farmers through South Australia are reporting it is dry at present, although moderate falls forecast in the next week may ease some of this moisture stress.
In Victoria, conditions are generally excellent, apart from isolated pockets of waterlogging in the north-east and some dry spots through the far northern Mallee.
Mr Goddard said in spite of the forecast yields being down on 2021-22, yield potential was still excellent.
Wetter-than-average conditions are expected to continue throughout winter and into spring for much of south-eastern Australia and patches of south-east WA, creating a strong outlook for regions with good plant populations," he said.
"However, more neutral conditions are expected for big canola growing regions in south-western VIC and south-eastern SA, which have not experienced above-average rainfall so far this year."
Pricewise, Mr Goddard said values remained high, although they have come down from records set earlier in the year.
"The price of canola exported from WA has eased from the mid-May peak of $1300 a tonne to around $1160/t currently."
"Indonesian tax cuts on palm oil exports, the move to reduce biofuel blending mandates in eight European Union member countries, and an expected return to a more typical Canadian canola crop have put downward pressure on domestic and international canola prices."