AUSTRALIAN canola plantings could sharply rally from last year's 1.7 million hectares if the outlook predicted by a Rabobank analyst comes to fruition.
In the recently released Rabobank Agribusiness Outlook 2020 report, Cheryl Kalisch Gordon, Rabobank senior grains and oilseeds analyst, said global factors meant canola could be the big improver in terms of pricing this season off already healthy values last year.
"Pricing below $570 a tonne is not going to be supported by either local or global fundamentals," she said.
A $570/t price would represent a decile 9 or 10 figure based on historic Australian canola values.
In terms of factors contributing to the bullish assessment, on the local front, Dr Kalisch Gordon said stocks following the 2019-20 harvest were likely to be the lowest in 15 years following a harvest some 40 per cent below average.
This combines with a slew of international factors such as increased Chinese soybean purchasing from the US, tightening global soy oil supply and European Union (EU) rapeseed (canola) stocks at 45pc below the five year average after their smallest harvest in 13 years.
Dr Kalisch Gordon also had good news for pulse producers.
She said global stocks were tightening, with increased demand outside of the world's major consumer of pulses in India.
The pulse supply and demand sheet has meant India is considering altering its controversial pulse import tariffs which have impacted Australian chickpea and lentil producers in particular.
"The late 2019 rally in chickpea and lentil prices may have overshot the market but fundamentals support higher year on year pricing for both commodities."
Chickpeas got as high as prices of $1050/t delivered to Queensland packers over the Christmas period, while lentils made to around $700/t delivered Wimmera in early January.
The story is not so exciting for coarse grains, with Dr Kalisch Gordon saying that barley and sorghum would rely on domestic demand for any upside this year.
On the wheat front Dr Kalisch Gordon said the market was looking for a clearer picture on fundamentals.
She said US wheat stocks had come down and could continue to fall but other key wheat exporters had increased stocks numbers.
Data released by Agri Census backed this up, showing that 2020 winter wheat plantings in the US had dropped to their levels since 1909.
Agri Census also said it was likely that the EU plant would be smaller due to wet conditions in France and the UK while in eastern Europe there are issues with dryness in Ukraine.
Overall Dr Kalisch Gordon flagged a useful, if not ground breaking increase of 4pc in world wheat prices, which would translate to around $12/t based on current prices of just in excess of $300/t delivered upcountry in the southern Australian regions with wheat still to sell this year, although this increase will not necessarily translate into a similar rise in local Australian values.