Favourable weather and strong demand have encouraged farmers to plant the state's biggest canola crop in a decade. More than 395,000 hectares were planted this year - 85,000 hectares more than last year and the largest planting since 2001, Australian Oilseeds Federation figures released today show.

Sowing finished in July for most farmers and canola is now in spectacular, full bloom.

''It's an absolute picture,'' said a Junee grower, David Lamont. ''Around here it's all bright yellow fields and lots of them.''

Farmers are partially switching to the golden crop or increasing their production area to take advantage of the unusual canola boom. In Mr Lamont's area, around Wagga Wagga, farmers tend to rotate between wheat, canola and lupins. Lupins are predominantly bought by Egypt and once their demand is met, there is limited opportunity elsewhere.

''This happened last year,'' he said. ''No one wanted to buy lupins, so a lot of the growers around here are switching to canola this year.''

Last year's La Nina cycle also brought heavy rains over summer, creating perfect conditions for canola growing.

Canola is an expensive crop to grow but farmers are putting their faith in high yields, Fiona Simson, president of the NSW Farmers Federation said. They have been offered good prices, a result of strong demand for polyunsaturated oil which is made from the canola flower.

Across the country, it is a similar story. The Bureau of Agricultural and Resource Economics and Sciences announced on Tuesday that canola production is forecast to rise by 7 per cent to 2.3 million tonnes thanks to good rainfall.

''Higher commodity prices are expected to result in better returns,'' Don McCaffery from the NSW Department of Primary Industries said.

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