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Rayglen Market Comments – February 5, 2020

Flax export demand has been limited out of Canada and if the price stays high relative to other crops, the Black Sea region will continue shipping into the market. Chinese flax imports increased in December, however, only 24,600 tonnes came from Canada while 49,400 tonnes were shipped form Russian and Kazakhstan as per analysts. The larger US crop has also limited Canadian supplies. It is unknown if Russia will have continued supplies to keep shipping at strong levels, but what we do know is that Canada will struggle to compete in that market now that Kazakh flax is entering the Chinese market. The coronavirus also has potential to interrupt global trades on flax shipments. Rail and ocean shipping could be restricted. The situation over there is evolving quickly and it is unknown how long the crisis will last, which could put some business on hold for the short term. For those looking to put some acres on the books for 2020, we have some new crop bids starting at $12.50/bu picked up.


The pea market has had little change since last week. Still the unexpected shock is the coronavirus and how it has affected China’s overall markets. This fear has brought uncertainty to the market, which has buyers staying more reserved in pricing. We know that things are worse than originally let on and this, along with the Chinese New Year that occurred quite close together, have the pea prices holding quiet. Current pricing is at $11.00/bu delivered on green peas, $9.00/bu delivered on maple peas (locations are limited) and yellow peas at $7.00/bu delivered. New crop values have yet to really surface, but we are expecting greens around $8.00 – $8.50/bu, yellows at $6.00/bu and maple peas have seen a few trades at $9.00/bu.


There is not much new to report on canary seed this week as markets remain comfortable. There has been no movement on price with bids still sitting at 28 to 29 c/lb FOB farm for Mar/April movement. New crop pricing for canary seed remains unbid, but grower offers are being put up in the 24 to 25 c/lb range with an act of God. Thus far most have gone untriggered, but a few have been picked off. We still don’t think it is a bad idea to try and get something locked up for the fall in this price range via firm target. If you are looking for the most up to date prices in your area, please call your Rayglen merchant for details.


Feed wheat prices this week remain about the same as last. Current bids range from $4.50 to $5.00/bu picked up in yard with that spread heavily varied by things like farm location (stronger bids closer to feedlot alley), timeline (prompt movement prices are depressed some) and grain quality (high moisture, heating, high vomitoxin – all will contribute to lower prices). If you have decent quality feed with some protein, we may have a buyer looking to price up a little more in select areas.  Milling wheat bids on a #1 CWRS, 13.5% are slightly up ranging from $6.50 to $6.60/bu delivered to plant in central Sask into the summer months. Durum prices remain around $8/bu for #1, 13.5% in the southeast corner of Sask and prices get worse as you deviate from that area. Most of the price support this week likely draws back to a weaker loonie against the US greenback.  


Chickpea markets see a glimmer of hope with USDA reports showing current exports well ahead of last year. On the flip side, Indian chickpea acres are seeded and set to see an 11% increase over last year and up 14% over a 5-year average. While this is predominantly desi chickpeas, it does affect the kabuli market congruently. The numbers on kabulis are not yet clear for Indian seeded acres. Turkey and India exports are struggling like Canada, as domestic supplies are ample and the need to buy elsewhere is finite. New crop values remain around $0.24/lb on farm and delivered depending on the location and mixed sizing. Steady Eddy is the name of the game on old crop chickpea pricing as it continues to hover around that $0.25-$0.26/lb on farm depending on shipment period.


Soybeans have staged a small recovery from Monday’s market lows… this might be a turning point or just a dead cat bounce. Markets generally poised in a pregnant pause as more “facts” leak out of China regarding the 2019 Novel Coronavirus. In the wake of the 2019-nCoV viruses’ impact on China, the Chinese government has asked for an extension as it relates to “phase 1” trade agreement execution. However, contrary to what the Chinese government indicated they intend to increase agricultural imports as a means to rebuild the decimated national swine herd. That leaves North American markets wondering what this will mean for soybean exports as Brazil is currently ~10% complete soybean harvest and staring down the barrel of a record soybean crop of 4.56 billion bushels. Local soybean bids are trading in the range of $9.50/bu picked up on farm. Dry bean market will remain supportive well into the new crop contracting period, predicated on disappointing production levels this fall. The faba market is starting to show a little life for Feb/Mar pre-Ramadan shipping with #2 export quality bids ranging from $9.00-$9.50/bu picked up on farm. Feed faba bids trading a little plus or minus either side of $6.00/bu picked up on farm.

We continue to field calls on feed barley as pricing continues to support this market, considering there was over a 20% increase in barley production this year totaling over 10MMT. That being said, feed pricing continues to trend in that $3.50 – $4.25 for dry, heavy product. The closer to Alberta the better as the large majority of the feed runs are headed into feed lot alley as quick as the buyers can find the trucks. One thing to keep in mind moving forward is road bans and winter weights coming off. Let you grain marketer know if you are on those secondary roadways. The malt market continues to tip toe around new and old crop pricing as it’s been hard to locate. Fingers crossed the pricing starts to roll out soon.


Lentils remain sideway this week as prices have not changed since last week’s commentary. Markets will likely remain flat until processors work through product bought in late December and early January. The Statistics Canada’s stocks report was released today with lentils ending at 1.8 MMT down from 2.11 MT in 2018, but still a head of the five-year average of 1.757 MMT.  The carryover stocks will have little effect on pricing at this point as India waits for the Rabi crop to be harvested. The carry out stock may affect further out pricing if Canada reduces lentil acres and the Rabi crop is less than expected.  A springtime rally will likely be the next time there is a pop in the market.  Pricing this week on #2 reds sits at 21-22 c/lb, X2 large greens 25-26 c/lb, #2 large greens 22-23 c/lb, and #1 small greens 20-21 c/lb. All indicated as FOB farm.  New crop bids are lacking at the moment, which indicates that buyers are not concerned about locking up any contracts at this time.


Oats prices continue sideways this week despite the Canadian Grain Stocks report being released and showing an increase in oat stocks of 11% over last year, as of December 31st, 2019. Even with this news, the futures board is mainly green leading one to believe there remains enough quality concerns for prices to hold strong up until new crop gets within reach. That being said, feed oats are trading between $2.50-$2.80/bu FOB farm depending on location. If you have good quality feed oats be sure to get us samples as we do have a special program that may be able to bump that price up for you if they meet the required specs. On the milling side, we’re seeing bids between $3.25-$3.50/bu FOB farm with the best options being closer to southern Manitoba.


Canola futures have started to rebound after what was a big decrease down to technical support levels last week. Caution remains in place, although less severe, due to the coronavirus in China but improvement in vegetable oil prices around the world have helped the canola market strengthen. With the losses from last week, buyers in China and around the world should see these low prices as a value buy. Buyers coming back into the market are part of the reason why we are seeing the futures price increase. Prices haven’t fully recovered but check local basis levels for April/May to see if cash bids can top $10/bu.


We have not seen much change in mustard this week other than new crop yellow bids slipping a bit into the 38 to 39 cent per pound range. However, these new crop bids remain strong, and growers have been putting some acres into contract. Brown and oriental bids are holding with up to 28 cents FOB trading on both. The hybrid brown variety isn’t seeing much interest and oriental preferred varieties are Forge or Vulcan. Call your merchant for up to date prices on these and other varieties. Spot yellow remains strong, trading at 40 cents/lb FOB, brown is trading at 28 cents/lb FOB and oriental sits at 23 cents/lb FOB for Cutlass and a bit higher for Forge and Vulcan, likely in the 25-cent range. Seed has been booking for all varieties so, please call your merchant for prices on certified and treated options delivered to your yard. Again, we think nothing is more important than starting your new crop off right using certified seed, especially with mustard. The risks are just too great to start with poor seed and endanger a #1 grade right from the start.

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.

Rayglen Market Comments – October 9, 2019

The pea market has seen little to no change from last week and although harvest is progressing slowly, most of the peas are already in the bin. Chinese pricing for Canadian peas isn’t showing any strength right now, according to recent reports, and this is a good indication that we likely won’t see a large uptick in bids for the short term. We are also still competing with the Black Sea region and their shipment of peas into the European market, which poses a significant freight advantage when compared to Canada. Current trades are being done at $5.75-6.00/bu FOB on yellows, $8.00-8.25/bu FOB on greens and $7.00/bu FOB on maple peas. If you have dun peas in the bin $7.00/bu FOB is an indication worth targeting.


The constant start, stop, start and stop due to the weather has prolonged harvest and the quality that was maybe once there, is no more by this point. As a result, feed buyers continue to see an onslaught of product being shown to them. Feed wheat/durum is fetching anywhere in that $4.00 – $4.40/bu range depending on location. Now, on the opposite side of the spectrum, is the good quality product. CWRS with a 13.5% protein is pulling in $6.40 – $6.90/bu with the later for pushed out movement, delivered to plant. The topic everyone is talking about… #1 CWAD. These past couple of days pricing has been on the rise, but where it lands is anyone’s guess. We haven’t seen a lot of commitment on either the buyer or the seller side for pricing and selling. We have seen some $9.00/bu FOB farm trade in select locations though the market is fluctuating in that $8.00-$8.50/bu FOB farm for the most part. A strong play for this market is to call your merchant and put out a target to try and jump start buyers with quantity, quality and a firm price in mind. One thing to be aware of when you are looking for prices is to make sure you have had testing done on your product. Buyers are looking to know what they’re bidding on and variables such as falling number and sprouting are going to be vital.


There is no big news out of the canaryseed market this past week. Bids are still flat in the 30c/lb range with some opportunity for prompt delivery available. Trading has slowed in the canary market and we suspect this can be attributed to harvest delays and continued producer bullishness. Buyers have pulled quite a bit out of the bins already at 30 cents, now we wait to see how the rest of the crop year shakes out and if this market has more legs. Producers have been waiting for a surge in price like this one and should hedge some product at current values. There is no saying this market pushes higher, especially when current levels are still being rewarded with sales. There is still lots of canaryseed in the field and producers are waiting patiently to take in this year’s crop. We hope mother nature will cooperate in the upcoming weeks.

Flax prices are holding sideways this week and 2019 harvested acreage has been minimal so far, with the focus being on more vulnerable crops. As another snow fall makes its way through the prairies, delayed harvest reflects on the near-term price, with values of $13.50/bu picked up in the yard being bid for product that is in the bin. Yellow flax prices are near $14.00/bu picked up. Flax harvest in the US has been reported favorable and prices have dropped off in recent weeks. Flax movement has been fairly quiet, but the supply squeeze and delayed harvest is enough to boost prices. The latest snowfall will create some more challenges, so it’s hard to say where these flax prices will go. However, the biggest factor still remains the Black Sea region. If the Black Sea region has modest inventories of flax, we could see export competition decline.  

Unharvested chickpea quality is starting to crumble, and we may be seeing a slight bump in recent #2 bids because of it. For those who have product off, we have seen trades hitting the books at upwards of 26 cents/lb delivered for large kabuli varieties. Desi chickpeas are in the 20-cent range, with little grower interest. Yield estimates seem to vary due to some disease issues this year, but there is carry-over, which is what is keeping prices from rallying too strongly. The Indian market for kabuli and desi chickpeas is also showing very few signs of life. India has stockpiles of desi chickpeas so; those supplies will be moved first. The impact of the harvest delay will play a factor in pricing out any lower grade chickpeas and finding homes for lower grades could be a struggle. We do have some pricing opportunities now, but these values depend on specs, so please call your merchant or send in your samples.


Feed barley markets haven’t seen much change from last week. Continued poor harvest conditions are holding prices steady as we wait to see if the weather will cooperate. A lot of tough and sprouted grain has been seen in the Rayglen office, and we have buyers for both! Just make sure you know the percentages of each, so your merchant can find the best home for it. October movement is tough to find, but there is a slight chance if you lock something in near-term. For the most part bids are quoted as Nov-Dec now for $3.10-3.40/bu FOB farm. Holding until Jan-Mar 2020 captures $3.20-3.50/bu or April-June 2020 at $3.30-3.60/bu FOB farm depending on freight. If you have malt quality barley, make sure you are sending us samples, as we have malt buyers looking for product.


The canola futures are down a touch today, with November sitting at $465/MT. Rain/snow has once again delayed our canola harvest and the general comment we’ve been hearing is that very little has been harvested thus far. Some is swathed or standing (now lodged), which makes it a lot harder to get. Canola can take the weather better than a lot of other crops and we hope there aren’t too many quality issues but won’t know until the crop hits the bin. For the few that have been able to harvest, yield reports are good. On a pricing note if you are taking canola off and there is some green count in it, get a percentage and talk with your merchant as we have homes.


The mustard market as expected remains flat. As this harvest slowly continues along, it will be interesting to see what quality of mustard is pulled off and if some gets left behind. Will this start to impact prices? It will be interesting to see what happens. Yellow mustard is currently trading at 36c/lb FOB farm, brown at 30c/lb and oriental at 23.5c/lb on Cutlass variety. All pricing is based on #1 grades and subject to sample acceptance. It may be time to talk to us about new crop contracting. Let us know what you are thinking for prices with an Act of God. We have also begun sales on all types of certified mustard seed delivered to your yard, both treated an un-treated.


Little change has taken place in the oats market this week. There are expectations of significant amounts of snow falling in south central Manitoba, which will have an impact on the oats harvest moving forward. In Saskatchewan, we are roughly just over 50% done the oats harvest and the cold, wet weather will likely affect the quality of what’s left in the field. Milling quality oats are trading between $3.40-$3.75/bu delivered to plant depending on what area you’re in and what delivery timeframe you choose. Feed oats are trading between $2.50-$2.75/bu picked up in the yard.


As the US soybean crop rating continues to slide, the market is expecting the USDA to lower its production estimate on Thursday. Couple that with the lower stocks report from the beginning of the month and you have a slightly nervous market that continues to feed the bull. Planting pace in Brazil continues to lag which also adds optimism to the market. Local soybean bids are trading in the range of $10.25-$10.50/bu picked up on farm. We have had reports of new crop faba harvest in southern regions with very few of the northern acres in the bin. #2 faba bean bids continue to hover near $7.50/bu picked up. Dry bean bids have held reasonably firm with selling opportunities across a few local buyers.


Lentil markets are holding onto last week’s pricing for the most part. A few buyers have pulled back their small green bids, but 20 cent FOB farm is still available in certain locations. Large green lentils seem to be holding at 24 cents for #2 or better and reds remain quiet with no movement in value this week. Any lentils remaining in the field will most likely be feed quality and this is reflected in recent bids. Feed market values are all over the place depending on colour and location. Feed greens have seen bids as high as 11 cents on farm and reds as low as 8 cents with on farm pick-up.  Low grade lentils will see the most downward pressure as the industry feels there will be ample supply to meet demand.


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.