May 17, 2012

Australia's 2012 rapeseed production forecast to fall

Australia's rapeseed production this crop year looks promising but output likely will slip from last year's record despite current dry conditions in eastern states, the Australian Oilseeds Federation said Wednesday (May 16).

In its first official 2012-13 forecast, the federation estimated rapeseed production at 2.97 million tonnes, down 6.9% from a record 3.19 million tonnes in the crop year that ended March 31.

A wet summer on the east coast resulted in good soil moisture and with continued firm prices the outlook for Australian rapeseed this crop year looks promising, it said.

"The overarching caveat, however, is the dry conditions experienced in much of the eastern states in recent weeks which is threatening establishment of crops," the federation said.

That warning reflects broad, heightened concern about the lack of autumn rain in eastern Australia. A lack of rain has helped support Australian wheat prices, said Luke Mathews, an analyst at Commonwealth Bank of Australia.

"Dry weather continues to plague much of the grain belt, raising concerns about early crop establishment," he said in note issued Wednesday. "Following a dry April, May month-to-date rainfall has been well below normal for most grain producing regions. Sydney has seen the driest start to May in 130 years, with not a single drop of rain recorded."

Australia's rapeseed is grown in the same south western and south eastern areas of the country as wheat, barley and other winter crops. Conditions in Western Australia seem typical for this time of year, with timely May rains assisting in the germination and establishment of rapeseed, the federation said.

In New South Wales, Victoria and South Australia, projected planted areas have already come back from early estimates as a result of deficient rainfall, it said.

Australia consumes 700,000-800,000 tonnes of rapeseed annually, exporting the rest, mostly to Europe for biofuel production.