Markets look beyond conflict to underlying market factors

By Mathew Trewin
20^th April, 2026

Dry conditions continue to bite across much of Queensland and northern New South Wales, and with little meaningful rainfall appearing on near term forecasts, sentiment is increasingly pessimistic. While Anzac Day is traditionally a line-in-the-sand for many growers when seasonal decisions are made, this year those decisions are already being pulled forward. In several districts, growers are reassessing rotations or questioning whether planting will proceed at all, particularly on marginal country. Canola hectares are being actively rationalised in favour of more drought tolerant options, reflecting both moisture constraints and a desire to reduce upfront risk.

Grain selling activity remains fairly subdued. Existing stocks are being held back for on farm feeding requirements, particularly in livestock heavy regions, and there is growing focus on maintaining feed security through winter. As conditions tighten, attention is turning to the logistics and economics of bringing feed grain into southern Queensland from other states, with early costings starting to be worked through as the season unfolds.

Further south, conditions present a more balanced picture. Southern New South Wales and Victoria are generally in better shape, with seeding programs advancing as planned. That said, follow up rainfall will be crucial over coming weeks to ensure crops establish evenly and move beyond early moisture stress. Without it, confidence in yield potential will quickly erode.

On the global front, market volatility continues, driven largely by ongoing conflict in the Middle East and rapidly shifting headlines. While key shipping routes are still some way from being fully normalised, there are early signs that diesel prices may be easing, which would provide a measure of relief for Australian farmers and freight operators after a prolonged period of elevated costs.

Markets are gradually beginning to look beyond geopolitical risk and refocus on traditional supply and demand fundamentals. Crop conditions across Europe and the Black Sea region are widely regarded as very good, underpinned by favourable weather and the prospect of ample supply moving into export channels. Some concern persists in parts of the United States, particularly ongoing dryness in hard red winter wheat areas, though at this stage this is unlikely to materially disrupt global export flows.

In oilseeds, canola remains supported by Renewable Volume Obligation (RVO) policy settings in the United States, which continue to underpin demand for renewable diesel and biofuels. This policy support remains a key structural factor for canola markets, even as broader agricultural sentiment remains cautious.