Domestic market in focus as the dry begins to bite

By Matthew Trewin
4^th May, 2026

Patchy rainfall across parts of New South Wales, particularly in southern growing regions, has helped lift confidence as sowing continues. These falls, while inconsistent, have been enough to encourage progress in some areas and provide modest optimism for the weeks ahead. In contrast, conditions further north remain very dry, and for many growers planting decisions are still finely balanced. A lack of meaningful rainfall has left soil moisture critically low, with some growers delaying or reconsidering their planting programs. In many northern areas, it is likely already too late for canola, given the crop’s narrower planting window and higher moisture requirements during establishment.

Input costs continue to weigh heavily on grower decision making. Fertiliser, chemicals and fuel remain expensive, and many growers are carefully doing the sums as they assess risk. This has led to increased interest in less input intensive crop options, particularly where rainfall outlooks remain uncertain. Trading activity has been fairly subdued, with limited volumes moving through the market. Some selling has occurred, largely driven by cashflow requirements and the need to fund seeding expenses, rather than by strong selling intent.
Conditions in Victoria, South Australia and Western Australia are generally more favourable. Weekend rainfall has supported soil moisture profiles, and further precipitation forecast in coming days is reinforcing confidence across those regions. As a result, planting conditions are broadly supportive, and seasonal momentum remains positive.

The current trading environment is largely focused on domestic feed demand. Demand is especially strong for feed grains moving into northern zones, where drought conditions are beginning to take a clearer toll on supply. This domestic demand is providing underlying support to markets, with a flow on effect extending down the east coast.

Export opportunities remain constrained, as competing origin grains continue to undercut Australian prices. These challenges are being compounded by a stronger Australian dollar, supported by ongoing inflationary pressures and the prospect of further interest rate rises. With the currency holding above 70 US cents and appearing well supporte

d at current levels, international competitiveness is unlikely to improve in the near term.
In global markets, the ongoing dryness across key hard red wheat regions in the United States remains a critical focus. Several major producing states recorded well below average rainfall during March and April. While some rainfall is forecast for mid May, uncertainty remains around its timing and effectiveness, and the impact on final crop size is yet to be seen.

Canola prices continue to find strength amid the broader energy crisis. Rising oil prices are translating directly into higher oilseed values, supported by renewed attention on biofuels as fossil fuels dominate headlines. This is further reinforced by regulatory biofuel targets in the United States, providing ongoing structural support for the oilseed complex.