Planting of wheat, canola and other crops is set to gather pace this month across much of Australia and farmers need ample supplies of crop nutrients to support early growth.

The price of urea in Australia was quoted around A$1,350 (C$1,298) per ton this week, up about 60 per cent since the beginning of the U.S.-Israeli war with Iran, analysts said. Australian diesel prices are up 88 per cent over the same period.

“Farmers are trying to reduce fertilizer application and switching planting from nitrogen hungry crops like wheat and canola into feed barley,” said Dennis Voznesenski, an agricultural analyst at Commonwealth Bank of Australia.

“Some are also reducing planted area, but this so far is minimal,” he said.

Australia’s wheat planting could drop by 10 per cent to 12 per cent given the current conditions, from 12.4 million hectares a year ago, an agricultural broker and an analyst said. Cultivation of canola is also likely to decline despite higher returns, they said. Both declined to be named.

Australia is the world’s fourth-largest wheat exporter and No. 2 supplier of canola, selling to importers across Asia, the Middle East and Europe. It also sells crops such as barley, chickpeas and pulses.

Straight of Hormuz is fertilizer choke point

Farmers worldwide are struggling to secure fertilizer supplies as planting season in key countries gets underway, with the Strait of Hormuz, which carries 30 per cent of globally traded fertilizers, severely disrupted by the Iran war.

Bank of America warned that the conflict threatens 65 per cent to 70 per cent of global supplies of urea, a key nitrogen fertilizer, with prices already up 30 per cent to 40 per cent.

U.S. farmers plan to plant less corn and more soybeans in 2026 than last year, the U.S. Department of Agriculture said this week. China has curbed fertilizer exports, while India is tapping alternative sources to boost supplies for summer-sown crops.

Corn, wheat and canola usually require higher application of urea than barley and pulses.

“Australia typically relies on China for urea, but export curbs have limited shipments,” said StoneX analyst Josh Linville.

“Buyers turned to Indonesia, only to face further constraints there and by the time they sought supplies from the Middle East, the war had already started and the Strait of Hormuz had closed.”

Crops need fertilizer at the start of planting as well as in development and pre-maturity stages. Crops planted in April and May are harvested in November and December.

“It is a big issue as the cost of farming has risen sharply in the last one month,” said Tobin Gorey, founder of commodities consultancy Cornucopia in Sydney.

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China has resumed purchases of Canadian canola in the last two weeks after a months-long hiatus triggered by a trade war.

Rival exporter Australia has been positioning itself to capture a share of the Chinese market, having sold around 500,000 metric tons to Chinese buyers after overcoming biosecurity hurdles that had previously blocked its access.

“Even if they do keep buying Canadian canola, China is now buying our canola for the first time in five years,” said Dennis Voznesenski, an analyst at Commonwealth Bank in Sydney.

WHY IT MATTERS: Australia has been positioning itself to capture a share of China’s canola market while Canadian canola was shut out due to trade disputes.

“Being back in China, even if not exclusively, is a good thing for Australian canola demand and prices,” he said.

Chinese buyers have snapped up as much as 650,000 tons of Canadian seed since Beijing and Ottawa struck an initial trade deal earlier this month that will slash tariffs on Chinese electric vehicles and Canadian canola, traders have told Reuters.

China imposed preliminary anti-dumping duties of 75.8 per cent on Canadian canola in August, largely halting shipments and idling its crushing industry. This month’s deal should drop total duties on canola to around 15 per cent.

Canadian and Australian prices will now influence trading decisions, dealers said.

“Prices hold the key,” said Stefan Meyer, who leads a trading team at brokers StoneX in Sydney.

There was little difference between the landed cost of Australian and Canadian canola in China, he said. “Australian exporters are matching the (Canadian) prices or offering slightly lower.”

Canada likely to retake lion’s share of China market

Canadian canola seed is being offered in China at $551 (C$745) a ton for March shipment, including cost and freight (C&F), compared with $550 a ton for Australian canola, two trade sources said. A third said Australian supply was $5-$10 cheaper than Canadian.

Canada, which grows much more canola than Australia, will likely retake the biggest share of China’s market, traders said.

“Domestic companies remain more inclined to purchase Canadian canola, having relied on it for years due to its large production and steady supply,” said Zhang Deqiang, an analyst at Sublime China Information.

But Australian exporters remain upbeat.

“We can compete on price for the volume and we would win demand if competitive,” said a source at an international trading firm in Australia.

This is “a significant improvement from not having any access to the market at all,” he said.

The first few Australian shipments are part of a trial to prove that seed from the country does not risk spreading a fungal plant disease called blackleg in China.

Two cargoes of about 60,000 tons have arrived so far from Australia. One, which arrived in China in January, is set to be crushed this week, according to traders with knowledge of the matter.

At least two more are due to sail in February, according to shipping data compiled by Bendigo Bank Agribusiness.

— Additional reporting and editing by Naveen Thukral

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Harvesting in the state of Western Australia is around halfway complete.

WHY IT MATTERS: Western Australia is the largest crop exporting region of Australia, one of the world’s biggest shippers of grains and canola seed.

Large Australian production will put downward pressure on global prices. Benchmark Chicago wheat futures fell to their lowest levels since 2020 in October amid abundant global supply.

In a monthly crop report, GIWA cut its estimate for Western Australian wheat production by 50,000 metric tons to 13 million tons.

It trimmed its expectations for barley by 50,000 tons to 7.42 million tons and for canola by 130,000 tons to 4.17 million tons.

Those forecasts compare with average production over the last five years in the state of 11.2 million tons of wheat, 5.2 million tons of barley and 2.8 million tons of canola.

Western Australia has been at the forefront of rising productivity in Australia, where farmers have increased yields despite declining growing-season rainfall.

GIWA said the speed of the harvest in some areas had put strain on infrastructure and logistics and in some cases slowed progress.

Wheat grain quality has been mixed but barley quality has been mostly very good, the higher-than-expected yields often being driven by larger seed size, it said.

Earlier this month, the Australian government said it expected national production this season of 35.6 million tons of wheat, the third-biggest harvest on record, 15.7 million tons of barley, a record amount, and 7.2 million tons of canola, the second-most on record.

Following are GIWA’s December estimates and comparisons with last month’s forecasts and last season’s production. Crop numbers are in metric tons.

— Reporting by Peter Hobson

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The pulse harvest is well underway in Australia, with total pulse production for the country forecast by ABARES to increase by 16 per cent on the year at 6.3 million tonnes.

Why it matters: Australian chickpeas and lentils compete with Canadian supplies on the global market.

Of that total, chickpea production is forecast to dip to 2.120 million tonnes from 2.267 million tonnes grown in 2024/25. Meanwhile, lentil production is forecast at 1.910 million tonnes, which would be up 51 per cent on the year.

Lupin production is forecast at 991,000 tonnes, up 27 per cent, while all other pulses at 1.283 million tonnes would be up by 15 per cent.

Increased demand form India has reportedly helped drive Australian farmers to grow more pulses. Australia exported a record 2.050 million tonnes of chickpeas in 2024/25, with 70 per cent of that total going to India.

“India’s domestic production had been impacted by poor seasonal conditions, resulting in high domestic prices,” said ABARES, noting that the strong sales to India were due to India instituting a tariff free period for Australian chickpeas.

“The increased demand for Australian exports resulted in chickpea prices increasing to over $1,000 (Australian dollars) per tonne, as exporters competed to secure supply from growers,” said ABARES.

The tariff free period ended on March 31, 2025, but the rate was adjusted to 10 per cent rather than the 66 per cent tariffs before the tariff free period.

ABARES expects chickpea exports will dip to 1.714 million tonnes in 2025/26, but sees lentil exports increasing to 1.537 million tonnes from 1.155 million in 2024/25.

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Why it matters: Australia is a major export competitor with Canadian grain into Asian markets

In a quarterly crop report for December, the government’s ABARES agency also lifted its projections for Australia’s barley harvest by around 1.1 million tonnes to 15.7 million tonnes and canola production by around 800,000 tonnes to 7.2 million tonnes.

Australia is one of the world’s biggest exporters of all three crops and is roughly halfway through its 2025/26 harvest. Wheat is used mainly for milling into flour, barley for animal feed and canola, or rapeseed, to crush for oil.

Plentiful supply helped push benchmark Chicago wheat futures in October to their lowest level since 2020. Barley and canola prices are holding up better, with barley in particular having more supportive supply-demand fundamentals.

“National winter crop production has been revised higher,” said ABARES, which stands for the Australian Bureau of Agricultural and Resource Economics and Sciences.

It said this was due to timely spring rainfall at critical growth stages and mild spring temperatures in most cropping regions.

Wheat production is now set to be four per cent above last year’s 34.1 million tonnes, 29 per cent above the 10-year average and the third-largest for any season on record, according to ABARES.

Barley output should come in 18 per cent above 2024/25’s 13.3 million tonnes, 33 per cent above the 10-year average and be the biggest ever.

The canola harvest is on track to be the second-largest on record, beating last year’s 6.4 million tonnes by 13 per cent and the 10-year average by a whopping 50 per cent, ABARES said.

The median estimates of five analysts just before ABARES published its numbers were for Australia to produce 36.1 million tonnes of wheat, 15.75 million tonnes of barley and 6.9 million tonnes of canola this season.

ABARES also issued forecasts for Australia’s summer crops, saying the country should produce 2.6 million tonnes of sorghum in the upcoming harvest, down four per cent from 2024/25, 943,000 tonnes of cotton lint, 23 per cent less than last season, and 178,000 tonnes of rice, down 66 per cent.

The sharp falls for cotton and rice are due to the lower availability of irrigation water, it said.

— Reporting by Peter Hobson

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“We are very concerned about another mite coming in with the potential to totally devastate our industry and cause significant problems,” said Peter Awram, director of the Canadian Beekeeping Federation.

The federation called a press conference in Ottawa on Tuesday to highlight the rise of the tropilaelaps mite (colloquially referred to as the “t-mite”).

The t-mite – which feed on developing bees and serve as a vector for viruses — has not yet been detected in Canada. However it’s been reported in Russia, throughout Asia and in Papua New Guinea. Papau New Guinea is 93 kilometres away from major bee trade partner Australia. Bee experts also warn the mite is headed for Europe.

Awram said the combination of the t-mite and the varroa mite – presently the industry’s most destructive disease pest — would be calamitous.

“We’ve already been suffering considerable problems with bee health because of our long winters,” he said. “A lot of it is in relation to another mite that’s been here for some time, but we are seeing massive bee losses overnight.”

Keeping the t-mite out of Canada

Keeping the mite out of Canada may require limiting trade exposure to infected countries. Alberta Beekeepers Commission President Curtis Miedema called on the federal government to prioritize policy that could help stem this tide.

“We’re hoping to see the government intervene and stop the imports of bees from offshore,” Meidema said. “We feel like North America needs to become a stronghold and keep this mite out.”

Peace River-Westlock MP Arnold Viersen has brought a motion to Parliament to address t-mites and a range of other trials facing beekeepers. He said the U.S. is already testing for the mite and searching trade vessels such as container ships.

“We’re hoping that the Canadian government can do something similar: monitor for it and work with the Americans so that we can keep this mite out of North America,” he said.

The motion proposes to restore free trade for honey bee package imports from regional safe zones in the U.S., to prepare an emergency response plan for t-mite, and other measures.

Vierson suggested the development of a North American bee strategy that would coordinate U.S. and Canadian efforts.

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Australia

The USDA attaché in Canberra pegged Australia’s 2025/26 wheat crop at 36 million tonnes, up from their estimate of 34.11 million the previous year. The Canberra desk based the increase on above normal rainfall in July and August. If the estimate holds, that will make for Australia’s third largest wheat harvest on record.

That increase in production is to push up ending stocks to 4.88 million tonnes from 4.65 million in 2024/25.

Turkey

It’s a different course for the Turkish wheat crop, with the attaché in Ankara forecasting 16.30 million tonnes, compared to 19 million in 2024/25. The attaché said the decline is due to unseasonably dry conditions in the country.

Turkish wheat ending stocks are to fall to 2.27 million tonnes from 3.42 million the previous year.

Kazakhstan

Wheat production in Kazakhstan was projected to pull back as well, the attaché in Astana forecast. However, the main impetus for the decline is that farmers have shifted away from cereals to more profitable oilseeds.

The 2025/26 wheat harvest was projected to be 15.50 million tonnes, down one million from the year before. Ending stocks are to slide to 1.20 million tonnes from 1.95 million.

South Africa

In South Africa, its white and yellow corn crops were forecast to glean a total of 16 million tonnes, down 946,000 tonnes from 2024/25, the USDA attaché in Pretoria said.

Strong prices led to more corn grown in 2024/25, but they have since pulled back, although favourable moisture conditions have been beneficial to the 2025/26 crop.

South African corn ending stocks are to shrink by 400,000 tonnes at 1.80 million.

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Australia exported 8.23 million tonnes of barley in the 2024/25 marketing year that ended in September, with seven million tonnes of feed barley and the remainder malt barley, reported the Australian Bureau of Statistics. China was the largest customer, accounting for more than 70 per cent of the total barley exports.

Why it matters: Australian barley competes with Canadian exports into key Asian markets

Australia grew 14.55 million tonnes of barley in 2024/25, with both production and exports hitting their third highest level on record. Early estimates for 2025/26 suggest production above 16 million tonnes — which would be a new record for the country and could lead to record exports.

“That creates the opportunity for a record export program of more than nine million tonnes, along with a recovery of carry-out stocks back to above average — a rare combination,” said Sam Roache of Compass Grain in a Grains Central article.

Roache said Australian barley prices will need to stay competitive to both China and secondary destinations this season to maximise the share of demand.

“We do not see the same bones for a big rally versus last year, with considerable oversupply and a recovery from the drought conditions in southern Australia, which were the main driver of the rally in (South Australia), Victoria and southern New South Wales this year,” said Roache.

Canada has already exported just over a million tonnes of barley through the first 13 weeks of the 2025/26 marketing year that began in August. That’s roughly double the movement by the same time a year ago. While Canadian canola exports have all been shut out of China, the country remains a top buyer of barley, with Saudi Arabia also showing increased demand for feed barley early in the 2025/26 marketing year.

Canada’s 2025/26 barley crop was estimated at 8.2 million tonnes by Statistics Canada, which compares with 8.1 million tonnes the previous year. Early estimates from Agriculture and Agri-Food Canada call for exports to hold steady on the year at 2.8 million tonnes, with carryout dipping to 1.0 million tonnes from 1.2 million.

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Why it matters: Australia is a major competitor with Canada into Asian markets, with larger Australian crops potentially cutting into demand for Canadian supplies.

With harvesting underway and due to run until January, five analysts lifted their estimates by an average of half a million tonnes since late last month.

The median of their estimates was for Australia to produce 35.7 million tonnes of wheat, which would be the third-biggest harvest on record.

Large Australian production will add to abundant global wheat supply that has pushed benchmark Chicago prices to five-year lows.

Australia is one of the world’s biggest exporters of wheat as well as barley, canola and other crops.

Analysts also raised estimates for Australia’s barley harvest by an average of around 400,000 tonnes. Their canola numbers were little changed.

The median forecasts were for a 15 million-tonne barley crop, the largest ever, and a 6.5 million-tonne canola crop.

Last year, Australia harvested 34.1 million tonnes of wheat, 13.3 million tonnes of barley and 6.4 million tonnes of canola.

Soil moisture has generally been good or very good through the growing season in much of Western Australia, northern New South Wales and Queensland, but deficient in parts of South Australia, Victoria and southern New South Wales.

Farmers in some southern regions decided in recent weeks to cut crops for fodder, especially after forecast rainfall failed to materialise.

“I’ve trimmed a bit off my wheat numbers for Victoria and parts of South Australia, where there’s been cutting for hay,” said Rod Baker, an analyst at Bendigo Agribusiness Insights.

“But what I’ve taken from there, Western Australia has made up for.”

The Grain Industry Association of Western Australia last week raised its forecast for wheat production in the state by nearly one million tonnes.

— Reporting by Peter Hobson

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The Grain Industry Association of Western Australia (GIWA) also raised its production forecasts for canola by 490,000 tons and for barley by 200,000 tons.

“The state is on track to come close to or possibly exceed the 2022 season’s record production,” GIWA said in a monthly crop report.

Why it matters: Australia is one of the world’s biggest suppliers of grains and canola, and Western Australia is its biggest export region.

Abundant global supply of wheat helped push benchmark Chicago prices to five-year lows this week.

Western Australia is now set to produce 12.6 million tons of wheat, a record-high 7.3 million tons of barley and 3.8 million tons of canola, GIWA said.

That compares to average production over the last five years of 11.2 million tons of wheat, 5.2 million tons of barley and 2.8 million tons of canola.

The association has now raised its wheat forecast by 3.2 million tons since its first estimate in July.

Average per hectare yields across the state are below the record year of 2022 but planted area has increased, the GIWA report said.

It said crops had escaped significant frost or heat damage and “whilst there have not been the finishing rains in the last month across all regions to push yields higher, potential yields have held in all areas other than the central region.”

Grain quality should be good because increased nitrogen use is preventing the dilution of protein content that typically happens when per-hectare yields are high, the report said.

Harvesting has begun in northern parts of the state and will move south during November and December.

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