Grain Snippet: SA Canola Harvest Finally Underway
The canola harvest in South Australia has commenced but has been delayed by cool and wet conditions through late spring. These same conditions have also added yield in some high rainfall districts. Prices for ISCC conventional canola have been in an uptrend since early October rising from $757/MT to $795/MT in late November but have declined slightly in early December on a Pt Adelaide basis.
The spread for conventional canola over GM canola has increased slightly and remains historically wide at around $120/MT. The export destination for ISCC conventional canola is the EU for biofuel production and the weak AUD/EUR exchange rate is supporting domestic prices. GM canola is competing with Canadian GM canola seed, which is now prohibitively tariffed at 75.8% into China, and is searching for other export markets, competing more directly with Australian GM canola. China has agreed to buy 65kMT of Aussie GM canola from Western Australia on a trial basis, lending a modicum of price support. However, more headway is needed with GM canola exports to China in order for the price spread to non-GM to narrow further.
ABARES released the December 2025 Crop Report this week, which has forecast the second largest winter crop for on record of 66.6MMT for 25/26, up 10% y/y. Australian canola production is forecast at 7.23MMT up 13% y/y, and second largest to 8.44MMT produced in 22/23. ABARES has forecast Western Australia to produce more than half of the Australian canola crop at 3.9MMT. However, this estimate is expected to increase with the Grains Industry Association of WA (GIWA) forecasting an even larger crop for WA of 4.3MMT.
Global canola prices have been influenced by the trade negotiations between the US and China, which saw an agreement in late October for China to buy 12MMT of US soybeans in 25/26, after preferencing South American beans over US in response to retaliatory tariffs. China has only purchased a small proportion to date, and as purchases are made, US soybean futures lift which has supported global oilseed prices. However, China is still likely to preference South American soybeans amid large forecast supplies; planting of Brazil’s 25/26 season crop started in October, which will see new crop being harvested February. Brazil is the largest soybean growing country in the world and is forecast to produce 175MMT in 25/26, up 3.5MMT y/y.
Weighing on global oilseed prices has been the decline in crude oil prices. OPEC+ has been increasing daily production each month for the past year and forecast a global surplus of 550k barrels per day in November. The potential for an agreement to end the war between Russia and Ukraine could see a lift of sanctions on Russian oil exports which would further weigh on price. Approximately 30% of global oilseeds are used for biofuel production and therefore prices corelate with those of crude oil.
This is a sample only, if you would like to view the entire document and our recommendations, please contact CloudBreak to discuss becoming a member on (08) 8388 8084.