Grain Snippet: Canola Crop Cruising
ABARES forecasts the 26/27 Australian canola crop area at 3.5Mha which is down slightly y/y by 0.2Mha and at trend yield, production is forecast at 6.2MMT down 1.5MMT y/y. SA and Vic 26/27 canola crops have experienced exceptional growing conditions for the start of the season. ABARES has forecast the area planted to canola in SA for 26/27 at 260kha up 10kha y/y and Vic at 550kha also up 10kha y/y. SA and Vic crops are well established and at this stage have some serious yield potential.
The area planted to canola in WA is also up y/y with the 26/27 season crop forecast to be 2.33Mha up a sizeable 0.6Mha (35%) y/y. This more than offsets the reduction in planting in NSW with the 26/27 crop forecast at 650kha down 300kha (31%) y/y. A forecast strong El Nino could have a negative impact on Eastern seaboard canola production through NSW in particularly, which struggled early. The fast crop development and good stored soil moisture in SA, Vic and WA leaves these crops less prone to a dry finish, but early flowering does heighten frost risk.
The European Commission has reduced their forecast for the 26/27 EU rapeseed crop to 19.8MMT, down 1.1MMT on the May report and down 0.4MMT y/y. Coceral’s forecast for the 26/27 Ukraine rapeseed production is forecast at 3.42MMT v 3.21MMT in 25/26. The report was prepared prior to the recent heatwave impacting most of Europe, which is expected to negatively impact yield. Ukraine 26/27 sunflower production is forecast at 13.8 v 11.6MMT in 25/26. Ukraine processes and exports most of their sunflower to the EU as sunflower oil, which competes with rapeseed oil. However, sunflowers grow through summer, and yield could be more adversely impacted by the hot dry weather currently being experienced through Europe, which would be supportive of EU rapeseed prices. The EU is a major export destination for Australian canola.
Agriculture Canada has forecast the area planted to canola in Canada to increase slightly to 8.84Mha for 26/27 up 0.09Mha (1%) y/y. Production is forecast to be lower at 19.2MMT down 2.6MMT (11%) based on a return to trend yield of 2.19t/ha. The average yield for 25/26 was 2.51t/ha due to excellent growing conditions in the second half of the season. 26/27 canola crop development has been delayed due to overly wet and cool conditions, however forecast warmer weather next week could see crops advance faster.
Canadian canola crush capacity is set to increase to 15MMT by the end of 2026, up from 13MMT. Agriculture Canada has forecast 26/27 canola crush at 13MMT up 1MMT y/y, with the US the main destination for canola oil as an ingredient for biofuel production, where demand has been expanding. Canadian canola exports are forecast to decline to 7.5MMT down 0.9MMT y/y and 1.9MMT lower than 24/25. Canadian canola exports were impacted last year by punitive tariffs by China which was resolved in March 2026.
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