Stats Can has reported that the 2017/2018 oat crop year had a decreased production of 8% to 3.4 MMT due smaller crop and poor yield. The total supply is down by 5%. The projected export for oats is expected to be down again, with about 90% of oats from Canada headed south to the USA. The other 10% are headed to Mexico, Japan and south Korea. StatsCan also reports that the Canadian oat price is expected to rise because of a higher US futures price and a struggling Canadian dollar. The world oat stocks are expected to rise in the 2018/2019 crop year, but they are still estimated to be close to record lows. Pricing on oats has not changed much from last week. A good quality #2 CW has been trading around that $3.00/bu mark. Feed oats have been trading around $2.50-$2.65 range depending on location. We have seen small premiums pop up for feed oats throughout the year so keep in touch with your merchant.
As we hear more about seeding intentions, we confirm an increase pea acreage. Although yellow acres are expected to drop, green and other classes will rise. According to Stat reports, the breakdown is as follows: a 23% increase in greens and 27% increase in other classes, with yellows boasting a strong carryout into the 2019-2020 marketing year, leaving supply relatively comfortable despite a loss in seeded acreage. This week, yellow pea bids have softened further on recent news out of China. Peas will fall under strict scrutiny and must pass pest and disease inspections before clearing customs. It’s stated that shipments unable to pass these inspections will be rejected or destroyed. Another political strong arm?… it sure seems like it, but we will have to play the game for now. That being said, yellow pea bids fall around (and in some cases lower than) $6/bu FOB farm on both new and old crop. Growers may still catch slightly better values in certain areas and should take those opportunities if they arise. We still have a buyer looking at green pea targets around $13.00/bu FOB on old crop with new crop at $8.00/bu FOB. With acres being up and many previously contracted, new crop green and maple peas have been softening.
Chickpeas have been a renewed topic of conversation this week from the producer side, as it seems growers are in a mind frame to empty out some bins. The market is positioned to buy, but the bids have either remained the same or softened. News from India is that pulse production was down in the Rabi harvest but only by about 10% and predominantly in gram. As that settles in, we wait for the results of the looming election in the hopes that it could shock the market into life again. Current crop values at $0.23-0.24/lb FOB for nearby movement and new crop is $0.22-0.23/lb FOB with an AOG. Feed values are at $0.14-0.16/lb FOB depending on the end user and factors that make the product feed. Desi chickpea values have not moved, and new crop is still to early to price out according to the buyers.
The Canola market continues its sideways/slowly leaking action as the market continues to lack any good news. Weakness in canola can be attributed to obvious issues with China, pressure from weak soybean markets and heavier than normal carryover. The dark cloud hanging over canola right now will, without a doubt, reduce some of the intended seeded acres for canola this year, but many expect the effect to not carry too much weight as other options are limited at this point. It’s hard to find a crop to point at and say “this, grow this” in the current market situation, so many opt to stick with the status quo. If you can find a $10/bu price on remaining canola stocks this may be a prudent move to sell and rip the band aid off given our current conditions. New crop pricing is sub $10 in most areas.
Wheat futures took a bit of a tumble yesterday, but as we write, seem to gain back some ground. We are still on the hunt for some high protein (14%+) milling hard red spring wheat delivered to plant in various locations this week and bids are indicated in the low $7/bu range. 14.5% pro and higher may provide a better value as well; it will all depend on what was previously bought that week. Durum continues to hover around $6.50/bu delivered plant range, with slightly better binds in some areas. Durum remains in light trade as you can expect. On the feed side of wheat, prices range in that $5.40 – $5.80/bu FOB farm range. One thing to keep an eye on moving forward is the continued dry weather conditions in many areas of the province. Should these conditions continue watch for a positive impact on feed prices moving forward.
Soybean futures are running for the doors today based no new trade talk news and the ever-mounting risk of increased US planted acres due to weather issue and planting delays. African swine flu continues to be a growing concern for reduced Chinese soybean imports. Old crop remaining inventory continues to hang over the market which feels heavier with every forecast of increased planted acres. Soybean local bids are trading under $10.00/bu picked up on farm. Old crop faba bean market remains the same with buyers on the lookout for scarcely remaining #2 quality with bids in that $11/bu delivered range and feed fabas are in the range of $6/bu picked up. North American bean market has a squared S&D which could provide for a sideways market barring an impactful weather event.
This week we continue to see a down trend in malt and feed barley prices. With the increase in not only feed barley acres, but also in corn acres, prices are expected to drop further barring any major production hiccups. If you are putting in barley this year, you may want to consider locking up some production as prices are still pretty attractive. New crop feed barley trades at $3.75-$4.40/bu FOB farm depending on freight, which in some cases includes an act of God up to 45bu/acre. New crop malt bids are available as well, but value will depend on variety and location; please call for more information. These malt contracts do not include an act of God. Spot prices right now on feed are between $4.30-$4.75/bu FOB farm.
Looking at the historical data on Canaryseed over the past 5 years, markets have had little fluctuation. The highest price was $0.27 and the lowest $0.19, with the average sitting around $0.22. This consistency in price proves that the supply and demand over the past five years is at an equilibrium. During the summer of 2015 we saw the last major price jump in the market as buyers were worried about a canary shortage. As the summer played out, buyers realized that there was more canary in the bin than thought and the high price disappeared. Canary has always been an under reported crop and this could be part the of the reason why we don’t see the big spikes anymore, as buyers are never all that concerned that we will run out. Canary is like the little boy that cried wolf, no one believes the story anymore. The markets at this time seems to be finding enough canary to fill the needs at $0.23-$0.235 picked up, higher than the five-year average – consider a sale. With the speculation of an increase in seeded acres this will also play a part in keeping markets from rising. Selling today is a good way to generate some cash for spring as most buyers are taking quick movement which cannot be said for a lot of other commodities.
Lentil bids have remained sluggish despite a bit of positive news coming out of India this week. The country’s National Bulk Handling Corporation (NBHC) released its final report on the Rabi crop estimates, stating a further drop off on expected production. They’re expecting an 11.46% drop on pulses this Rabi crop, due mostly to a significant decrease in black gram production, one of India’s most popular pulses. That being said, there is still significant stock of lentils on farm in Canada and import tariffs into India for the foreseeable future that will make any price increases a slow grind. Spot red lentil bids today are hovering around $0.18/lb picked up on farm. Large green bids are around $0.19/lb picked up for a #2 and small green bids are at $0.175/lb delivered plant on a #1.
Brown flax has seen a little spurt in pricing over the last week with $13.50/bu delivered to plant for #1 quality available. We are also seeing up to $13.00/bu delivered for new crop, with an act of God. Yellow flax is mostly sideways with $13.00-$13.25/bu picked up in the yard being the high. Flax supplies are tightening up and providing support for the market. Analysts report that 47% of on-farm supplies have been delivered, up from the 40% delivered last year. There is softer export demand, but hopeful China does not completely back away from Canadian flax to keep exports on pace. The US market is flat, and the latest USDA report shows a 66% increase in flax acres. This would reduce Canadian exports for 2019/20. The take-away is that Chinese trade is cautious, US and European demand has been on the sidelines and so the lack of demand will put a hold on potential gains in prices. Any upside swings in prices will remain modest.
Mustard is still range bound this week, but we have seen softening on production contract prices. There is some talk about a slight shift in mustard acres because of the canola issues with China. We are not seeing a big migration as most growers are not jumping the gun and switching, but perhaps there has been a few. We will see how this pans out over the next couple of weeks as seeding is starting in some areas of Alberta. Spot prices are at 35 cents on yellow, 30 cents on brown and 24 cents on oriental, depending on variety. New crop bookings have been fairly steady as mustard is still one of the bright spots for the 2019 planting season. Yellow has slipped slightly to 35 cents, brown has also slipped to 28 cents, and 25 cents is available on Cutlass type oriental. If you have Forge or Vulcan, new crop at 26 cents is available. Certified seed is pretty well wrapped up for the year but if you need some, call and we can try to work something out for shipping.
Rayglen Market Comments are for informational purposes only. Rayglen Commodities and its agents or employees shall not be liable for any loss or damage suffered by any person as a result of reliance on any of the contents contained within these products, whether such loss or damage arises from negligence or misrepresentation or any act or omission of its agents or employees.