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There’s a certain numbness we are all feeling going through this pandemic. Waking up and thinking, yes, it is real, I didn’t dream it.
So, let’s take a step back and consider just how fortunate we are in grain growing at the moment.
It was only a few months ago that we were on tenterhooks, waiting for that predicted wetter-than-average season to come to fruition.
Just in the nick of time, the rain arrived and dry-sown crops bounced out of the ground.
While Australian farmers are revelling in photos on social media of bogged tractors, it’s a very different picture in the northern hemisphere.
Drought is still ravaging much of Canada and the United States.
Canada is a good country mile in front of any other country in canola production. While we’re second on the list, they still produce more than four times what we do.
“It’s not nice to say but the reality is the Canadian farmers’ loss is our gain and them having less to export is going to put us in the front seat to supply a lot of markets, especially into the likes of Europe and China,” Thomas Elders market analyst and Country Today regular Andrew Whitelaw told the program last week.
“We’ve seen Canadian canola futures hit that nice, beautiful $1000 a ton. It is a price we got to briefly for a couple of hours in June, but now it’s got there and it’s settled there, which is really good because it’s probably at a record level now,” he said.
“While we’re not seeing the same price levels as Canada, it is flowing through here in Western Australia with the canola price above $915 a ton for the coming harvest and the east coast slightly lower but still broaching that $900.”
What’s extraordinary about this is that usually a bumper crop here results in price falls: the old supply and demand pendulum domestically.
But global trade has outmuscled local tensions.
NAB Economist Phin Zeibell told Country Today, it’s a rare phenomenon.
“Two years ago we had this big drought-induced shortage – of wheat – in eastern Australia and that pushed local prices higher than global benchmarks,” he said.
“I think what we’re seeing now… on the ground for Australian producers is wheat prices with a three in front of it, easily with a three in front of it coming into harvest, and that’s a great season… maybe even better than last season.
“So you’ve got this great combination of prices and volumes which doesn’t happen very often.”
It gives a whole new meaning to the saying, ‘there’s money in mud’.
I’ll leave the last word to Andrew Whitelaw: “This will be a year, and you can hold me on this, this will be a year to be remembered and talked about in a generations time.”