A poor week on international canola markets saw oilseed prices across Australia fall by as much as $100/t earlier this week.
ABB's Victorian port price came back from $575/t on December 1 to just $490/t on December 8, before a small spike has it now standing at $510/t, while there have been similar falls in other states.
The Emerald Group said it has adjusted their WA canola pool values to account for the as the worldwide canola market suffered a negative week plunging $C30 per tonne on the back of falling crude oil and harvest pressures.
Emerald’s number one 2008/09 canola pool values have slipped $10/t to $630/t FOB.
The number two pool, which opened last week, has been revised to $580/t FOB.
It is tough news for many farmers, who have seen the relatively stable canola price as a rare positive in a harvest marked by free-falling cereal prices.
Aggressive marketing by growers both in Western Australia and through Victoria has been a factor in forcing prices downwards.
The consensus among many growers was that the canola price was the best out of all the commodities, and as such many farmers have sold their canola for cash to generate cashflow while storing other grain in the hope of a post-harvest price rise.
The falls come about in spite of a positive basis of close to $50/t, reflecting the shortage of canola across Australia after key production areas in NSW and Victoria either failed due to dry conditions or suffered heavy frost damage.
Rob Proud, Emerald state manager for WA, said the worldwide canola markets fell C$30/t in the past week, on the back of continued global market pressure resulting from an overflow from falling crude oil and equity markets.
"Increased levels of farmer selling in Australia and Canada have added to this pressure, along with improved weather across Argentina as they finalise soybean plantings," he said.
"Local prices have been impacted by a number of other factors. The thanksgiving holiday in the states meant many traders were away and markets closed, reducing global liquidity and the aggressive selling by WA growers at this time have hit local prices."
However, earlier this week the Commonwealth Bank reported a 4.7pc rise in US January 09 soybean futures and a 3.7 rise in Canadian January 09 canola futures, along with a sharp spike in crude oil prices, all of which are likely to have a positive influence on canola prices, driving them back above $500/t port.
Mr Proud said the crude oil sector would be an important lead for the canola price, saying that the short-term lead on canola prices will be taken from outside markets, mainly crude oil and equities, along with local Australian harvest progress.
The Australian Oilseeds Federation (AOF) November forecast was for Australia to produce 1.4 million tonnes, compared to last year’s drought-ravaged 1.07 million tonnes, well below historic figures close to 2 million tonnes.
The November estimate was 100,000 tonnes lower than the October figure, on the back of the poor conditions, with over 50pc of the canola produced coming from Western Australia.
Email a friend