WA farmers set to cash in with good yields and great prices for canola off the back of ‘terrible’ Canada crop

The price of canola is being tipped to stay stronger for longer, with WA farmers set to cash in on bumper export values brought on by a disastrous Canadian crop.

Global supplies of canola have fallen considerably since the world’s largest exporter — Canada — had its 2021 crop crippled by record high temperatures and drought.

Thomas Elder Markets commodity analyst Andrew Whitelaw said it was the worst year for Canadian canola in more than a decade.

“This year they have had a terrible crop,” he said. “We’ve had our drought, and now it’s their turn.”

The awful news for Canadian farmers is a turn of fortune for Australian producers, who are enjoying a terrific harvest.

The latest Grain Industry Association of WA crop report estimated WA farmers would produce more than 2.7m tonnes of canola this year. Close to 450,000 tonnes is expected to reach the Geraldton Port Zone.

Mr Whitelaw said it was the perfect storm for WA farmers who planted extra canola this season.

“This is something that doesn’t regularly happen,” he said,

“We don’t get both — good yields and good prices. Events overseas have taken over.”

The price for WA canola is at record highs, selling for more than $900/tonne. About $600/tonne is historically a good amount according to Mr Whitelaw.

Australian canola exports are expected to bank $3.3 billion this financial year — up 31 per cent.

CBH chief marketing and trading officer Jason Craig said it meant trucks coming in were carrying upwards of $60,000 worth of the grain.

“For WA canola, these are the best prices we’ve ever seen,” he said.

As farmers start to plant for next year, the billion dollar question is how long it will last.

Mr Whitelaw said that all depends on Canada, but predicted it would take time for global canola supplies to catch up.

“If Canada has a good crop the price will lose some of its lustre,” he said.

“If they have a bad crop again it will stay high.

“But they don’t have stockpiles, so it will take a bit of time to fall back down to $600.”

Mr Craig said Australia was the “origin of choice” for the European, Middle Eastern and Japanese markets, but interest could slow into next year.

“What does happen for northern Europe and Europe is you tend to find that as we get closer to that June-July period, they then start to focus on their own domestic crop,” he said.

“So we then start to see that those prices come off depending on what that crop looks like, so we will start to see a little bit of slowing of interest as we start to get towards that time period.”

The State’s crop is anticipated to be a bin-busting 20.56 million tonnes, with 11 sites across the grain handler’s network breaking receival records on October 17.