Special crop market overview

Pulse trade with India

G. Chandrashekhar is a global agribusiness and commodity market specialist in India, whose commentaries I regularly follow in the Hindi Business Line. His thoughts expressed in that publication recently regarding Canada/India pulse trade prospects are seen as troubling, in my opinion. They make me wonder if greater problems exporting to India are coming into the second half of the current 2017-2018 marketing year. See what you think about the column

I think if India produces another big pulse crop this winter, they might drag their heels longer than we thought on pulse trade. For peas, does a 1.35 million tonne smaller North American crop and regular Chinese buying and improving domestic protein demand on peas offset what India won't buy? Maybe. Lentil trade, though, is probably more troubling than peas, meaning price recovery on reds is going to take some time.

After strong prices in 2016, the Prairie lentil market is now firmly entrenched in recuperation after a bull market. Exports are weak, with traders reporting little interest from our main buyer, India, where domestic and imported supplies are adequate. At the same time, Prairie farmers typically move large amounts of lentils into the market at harvest time, further softening prices.

Current bids for No. 1 large green lentils - around 38 cents per pound - are down sharply from the previous year’s highs of nearly 70 cents. 

Unless India’s winter pulse crop goes off the rails, I don’t see a quick fix for the red lentil market.

Reds remain a dog, dropping below 20 cents per pound now, and I just don’t have any answers on this one unfortunately. Unless India’s winter pulse crop goes off the rails, I don’t see a quick fix for the red lentil market.

Mustard prices hold up well

The mustard market is holding up rather well with movement opportunities developing. Yellow and brown mustard are both trading at 40 cents per pound picked up, while oriental mustard is at 34 to 35 cents. Spring movement on yellows are seen as high as 42 cents. 

New crop Canadian production was down this year. In its model-based crop production report released Sept. 19, Statistics Canada forecast 2017 Canadian mustard output at only 115,000 tonnes. That compares to 235,600 tonnes a year ago, a 51 per cent drop given acreage affected by drought this summer.

But it remains a debate on whether the combination of beginning stocks and forward coverage might still be sufficient to get through the 2017-2018 marketing year without creating a serious supply and demand imbalance.

Carry-in is estimated at about 85,000 tonnes, up from the year before carry-in of 25,000 tonnes.

Prices have inched higher over the past six weeks or so. It's hard to be bearish on mustard given this year’s smaller crop. 

Ukraine and Russia generally grow yellow as that market is the most liquid of the mustard varieties. They had a decent crop this summer and they are still aggressively moving it out. Higher prices are possible once they hang up the sold out sign.

Canada needs to increase 2018 acreage and realize good yield.

Canaryseed prices stuck

With prices stuck at 20 to 21 cents per pound, it remains hard to be excited about immediate market prospects. Prices did tap as high as 24 to 25 cents in mid-August, but the market sagged once it became evident that Canadian cereal yields were better than expected.

The price likely dribbles along at 19 to 22 cents for now. I suspect the next chance to sell into any upswing will have to wait until next spring. Key buyer Mexico has been an unenthusiastic player.

According to StatsCan, just over 255,000 acres of canaryseed was planted in Saskatchewan in 2017, down slightly from the year before. Production came in at 116,300 tonnes, which compares with 140,300 tonnes in 2016.

Bottom line

After strong prices in 2016, the Prairie lentil market is now entrenched in a bull market hangover. The mustard market is holding up rather well, while the next best chance to sell canaryseed into any price upswing will be next spring.

Mike Jubinville of Pro Farmer Canada offers information on commodity markets and marketing strategies. Call 204-654-4290 or visit www.pfcanada.com to find out more about his services.