Grain Snippet: South Australian Canola Production Rebounds
South Australian canola production rebounded in 25/26, with production estimated at 507kMT, up 155kMT (44%) on the drought impacted 24/25 season and returning to the 5-year average. The area seeded in 25/26 was slightly below average at 226,000ha, however a cool and late wet spring led to above average yields, good quality and higher than average oil, particularly in the higher rainfall regions. Australian canola production also lifted in 25/26 with ABARES forecasting a 7.2MMT crop up 0.8MMT (12% year-on-year and the second largest on record (against the 8.4MMT in 22/23).
Globally, canola and rapeseed production also increased in 25/26 with the USDA estimating record breaking production across Europe, Canada, Australia and Ukraine at a combined 53MMT, up 6.7MMT (14%) y/y. The bulk of the increase was due to improved growing conditions in Europe and Canada. On the back of the improved global production, canola stocks have increased and the stocks-to-use ratio has loosened from 7.4% in 24/25 to 11.2% in 25/26, which has weighed on canola and rapeseed prices following the northern hemisphere harvest. Europe and Ukraine harvest rapeseed in June through August and Canada from August to October.
Global canola and rapeseed prices reached a low in mid-December weighed down by the increase in global production and also the announcement by China of tariffs on Canadian canola seed imports. China is a major buyer of Canadian canola seed importing around 5MMT annually. This tariff was in addition to the tariff on Canadian canola meal in March 2025, which curtailed the annual import of 2MMT by China. The tariff on canola meal and seed led to a decline in Canadian canola futures prices.
In January, Canada and China reached a trade deal which will see an end to the tariff on canola meal and the tariff on canola seed reduced to 10% which is due to take affect early March. This has seen a lift in Canadian canola futures which has also been supportive of European rapeseed futures. A lift in crude oil prices, due to geopolitical tensions, has also been supportive of canola and rapeseed prices.
When the China tariff on Canadian canola was first announced, Australia was able to negotiate access the Chinese canola market. Trial shipments of canola from Australia were arranged from Western Australia to Chinese ports. WA has produced a record canola crop this season, with the Grain Industry association of Western Australia (GIWA) estimating total canola production at 4.37MMT, with 50% likely to be GM canola. The spread between GM and non-GM canola in WA is around -$50/MT which compares to around -$90/MT in SA. The tightening spread is indicative of improved potential market access and sentiment, with two more vessels reportedly destined for China this month, following the initial trial shipments.
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