May 21, 2010

Rapeseed output in Australia may advance to decade-high

Rapeseed production in Australia, the third-biggest exporter, may climb by 19% to the highest level in a decade, according to an industry group.

Output may increase to 2.27 million tonnes this season, from 1.9 million tonnes last year, the Australian Oilseeds Federation said. That would be the largest crop since a record 2.4 million tonnes was harvested in the year ended June 2000, according to the Australian Bureau of Agricultural and Resource Economics.

Farmers are sowing rapeseed after rainfall provided a favourable start to the season in Eastern Australia. Declining cereal prices also encouraged oilseed planting. Acreage in Western Australia, the largest producing state, will depend on rainfall this month after a dry start to the season, according to the Australian Oilseeds Federation.

"That is the big unknown at this stage. Quite a lot has been planted dry and it is awaiting sufficient rain to get out of the ground," said Nick Goddard, executive director of Australian Oilseeds Federation.

Rapeseed for July delivery gained 1% to CAD379.20/tonne (US$356.3) on the ICE Futures Canada exchange at 2.59 p.m. Melbourne time, trimming this year's decline to 8%. Wheat futures have fallen 13% this year. Australia's rapeseed planting may increase to 1.61 million hectares from 1.39 million last year, the federation said.

More rain was needed soon in some eastern regions to complete sowing and to allow plants to emerge, Goddard said. Farmers in Western Australia may also switch some land to wheat if they miss the planting window because of dry weather, he said. Production will depend on rain throughout the growing season and is also subject to the threat of locusts later in the year, Goddard said. Harvesting usually begins in November.

Australian production may increase to slightly above 2 million tonnes this harvest, Rabobank analysts Luke Chandler and Doug Whitehead said in a report this month (May 2010).