Home for downgraded canola

28 Dec, 2010 07:46 AM

THERE are now segregations for canola downgraded by sprouting and low test weights caused by weather damage and at least one marketer is buying canola with a higher percentage of sprouted grain.

To fit into the standard segregations, canola must have less than five percent sprouted grain and a test weight of above 62 kilograms a hectolitre.

However, GrainCorp is taking a CAN 3 grade for conventional canola with above five percent sprouting, along with a CAG 3 grade, for GM canola with similar sprouting problems.

There is also a CNTW segregation for canola with a test weight between 58 and 62kg/hl.

Early indications suggest that crops in the Wimmera generally remain fine and are going into the main canola bin, but crops in the North Central and southern NSW are downgraded, primarily due to low test weights.

“There’s been a lot of low test weight canola coming in around here,” said Echuca-based Australian Grain Accumulation (AGA) regional manager Sam Toll.

Cargill has emerged as the early buyer for weather damaged canola.

Through its AGA business, Cargill is buying canola with between 5 and 10pc sprouting, along with low test weight parcels.

AGA Horsham field merchant Andrew Brown said the high-sprouted canola was trading at around a $50 a tonne discount to standard canola, while a matrix was operating on test weight.

For every kg/hl under 62kg/hl, there is a two percent drop in price.

With canola prices around the $550/t upcountry, 1kg/hl under would result in around an $11/t discount, 2kg/hl $22/t and so on.

Mr Brown said the new specifications had been brought in primarily due to weather damage in NSW, but that had now spread to central Victoria as well.

Mr Brown said the canola could be used in Cargill’s domestic crushing plants, but would take longer to process and involved more wastage.

“There is a greenish colour to the oil when using canola with more sprouting that has to be refined out, which means around 10-20pc of the oil is refined out, so this is reflected in the price discount.”

Elders Toepfer Grain (ETG) managing director Mark Thiele agreed that there would be some scope for using downgraded canola for oil, especially within the domestic market.

“It comes down to the performance of the oil at crushing.”

Other than that, he said there were also potential stockfeed applications for damaged canola.

The Australian Oilseeds Federation (AOF) is busy working with industry to determine what options there are for affected grain, and how strong the demand is for stockfeed along with the opportunities in using sprouted canola for oil.

AOF executive officer, Nick Goddard, said while some sites were accepting canola with varying degrees of weather damage, growers needed to do their homework before making a delivery to determine where the grain will be accepted.

Mr Goddard said if canola was not suitable for crushing, there could be stockfeed applications, but he did not know what the pricing structure would be for canola priced primarily on its meal value.



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