The latest StatsCan figures have confirmed the anticipated increase in chickpea acres for this year’s production. However, there is also a reported decrease in yield, which some remain skeptical about, suggesting it might not be as low as indicated. If yield estimations are correct, it would mark the lowest yield since the 2014-15 crop year. These reports, regardless of differing opinions, are contributing to the current market stability due to concerns over potential supply shortages. With chickpea harvest progressing faster than usual this year, there have been few reports of size or quality issues so far, alleviating some initial worries. Market bids have remained relatively steady over the past week, with buyers entertaining targets slightly higher than quoted values. Both old and new crop bids for a #2 large Kabuli chickpea are estimated at around $0.54-$0.55/lb FOB farm for September-October, and USD $0.39/lb. These values are for larger varieties, with a potential spread of $0.02-$0.03/lb for Frontier and smaller types. Feed chickpea bids are approximately $0.35/lb FOB farm, with options for quick shipping and no carry in the market.
StatsCan has reported oat production at 2.429 million metric tons (MMT) for the 2023 crop, marking the lowest output since 1991. This represents a substantial decline of 53.5% compared to the previous year’s harvest, during which Canadian oat growers yielded 5.226 MMT. Despite the value of other feedstocks dwindling, oats have witnessed a surge in value for product headed to the feed market. Purchasers are currently showing bids ranging between $4.00 and $4.50 per bushel FOB farm. Moreover, specific freight locations have seen higher value prospects. In the milling sector, oats have commanded prices in the vicinity of $4.50 to $5.00 per bu FOB farm for #2CW grade. For those open to delaying delivery until 2024, numerous bids have materialized, surpassing $5.00 per bu, and peaking at an impressive $6.25 per bu for deliveries into Manitoba for June and July. Turning attention to the organic markets, bids hover between $9.00 and $9.50 per bu, delivered plant in Saskatchewan and Alberta, contingent upon the movement timeframe.
ICE canola futures have started the day in the red, with November currently valued at $810.50 per metric ton (MT), at time of writing. Delving into canola-related updates, the latest StatsCan report has revealed an estimated decline in Canadian canola production compared to the previous year – a decrease of 6.1%, resulting in an estimated output of 17.6 million metric tons (MMT). This decline comes in spite of expanded areas; however, the estimations are grounded in projections of lower anticipated yields at 35.4 bushels per acre. Another attention-grabbing headline, freshly released by StatsCan, highlights the unprecedented July canola crush figures at 961,000 MT – marking a historic monthly crushing record for Canadian canola. Notably, Australia’s production is also expected to diminish due to drier conditions. Taking into account these three factors, canola seems to have support in the immediate future. For those contemplating canola sales, connect with your merchant to explore farm pickup options in your area.
Flax markets have experienced another upswing this week, now showing a price range of $15.50 to $16.00 per bushel (bu) for on farm pickup. According to the most recent StatsCan report released this week, a significant 44% reduction in overall production year over year is expected and analysts appear to be comfortable with this estimation. It’s noteworthy that Kazakh flax inventories should start decreasing as an additional 46,000 tonnes were exported in June. Although there have been some advancements in Chinese import demand, the sustainability of substantial imports throughout 2023/24 remains uncertain, as supplies may be rationed. Presently, the market seems to possess a reasonably adequate supply, leading to the anticipation of predominantly sideways price movements in the near term.
Canaryseed maintains momentum this week, unsurprisingly, as buyers actively seek tonnage. The current indication hovers around $0.46/lb FOB farm, but any offer surpassing this threshold is being considered with prompt shipping likely attainable. The canaryseed narrative is familiar to most with drought conditions taking a toll on the crop. StatsCan reports have confirmed this, indicating a shortfall in production compared to the levels seen in recent years – depicting a 25% year-over-year reduction. Despite this, it is still a common occurrence for buyers to step up during this period and secure enough supply to sustain them for several months. It is highly recommended to lock in some quantities at these favourable values. This not only frees up storage space, but also bolsters the farm’s cash flow—a welcome benefit.
A lot to unpack in lentil markets this week, so let’s begin with market prices: red lentils reached 40 cents/lb FOB farm last Friday with some buyers maintaining these levels and others moving slightly lower on Monday’s open. Large green lentils are holding steady at 60 cents FOB farm, whereas small greens have dipped to 58 cents FOB farm, with the odd offer occasionally triggering at 59 cents/lb. U.S. origin medium greens are fluctuating between 40 and 41 cents/lb USD. Specialty lentils such as French greens and Beluga (black lentils) are experiencing quieter demand at present. Shifting focus to the news of the week, StatsCan has unveiled its early production estimates. The lentil estimation carries an element of surprise, projecting a total output of approximately 1.54 million metric tons. This stands notably lower by nearly 760,000 MT compared to the previous year and exhibits a decline of 60,000 MT from 2021. Should this estimation materialize, there’s a potential for an uptick in lentil markets in the impending weeks. However, the estimates are met with skepticism as the industry leans towards the belief that yields have surpassed initial predictions. Ascertaining the precise yield of this year’s harvest will take some time as there are substantial yield variations throughout the prairies. Even if StatsCan’s estimates are adjusted, it is unlikely ending stocks will be boosted enough to provide a significant downturn in pricing, so values should remain stable. The pressure on red lentil prices could escalate as the Australian harvest draws near, considering their government’s anticipation of yet another productive crop.
Wheat prices exhibit mixed performance across various classes. Any upward momentum is fueled by the anticipation of diminished Canadian yields. Statistics Canada has reported an all-wheat production estimate, revealing a 14% year-over-year decline. This shift is primarily attributed to significantly reduced durum and spring wheat production, partially counterbalanced by an increase in winter wheat production. Feed wheat bids span the range of $9.00 to $9.25 per bushel FOB farm, while milling wheat bids show minimal deviation from feed values. Posted durum values hold steady at approximately $14.00 per bushel delivered for nearby positions, with a positive spread extending to $15.00 per bushel delivered in deferred positions. Target price offers have achieved slight market premiums over posted bids.
U.S. soybean futures seek fresh demand. Recent USDA sales reports have been absorbed by the market, awaiting further demand updates before making substantial moves upward. Local bids fall within the range of $18.50 to $18.75 per bushel FOB farm, contingent on location. Anticipated late-season support from Mexican demand and reduced production is expected to bolster dry bean bids, although they currently contend with surplus old crop supplies. Canadian faba bean volumes are projected to decrease year over year. Feed-quality faba beans continue to garner support from pet food values. Local bids stand within the range of $13.50 to $14.00 per bushel FOB farm for export-quality #2 faba beans, while feed-quality values hover around $10.00 to $10.50 per bushel FOB farm, varying by location.
Mustard yields are now being reported at a consistent pace. Growers are indicating yields that, for the most part, are not particularly impressive across most areas. While a few pockets are showing favourable production, the majority of regions are meeting production contract requirements with little to no surplus. Predicated on this, pricing remains robust this week. Yellow mustard is situated around 86 cents per pound, brown mustard is maintaining a level of approximately 78 cents and oriental mustard prices persist in the range of 72 to 74 cents per pound, all quoted as FOB farm. At this stage we might suggest growers test out a firm target to try and capture values slightly stronger than posted. Inquiries have already surfaced regarding new crop mustard acres and seed. It’s advisable to inform your merchant to include you on the list, given that these programs are still in the pipeline and no concrete bids/seed pricing have been presented yet.
While rollbacks at box stores might be appreciated, the situation is quite different when it comes to grain. Barley bids are undergoing a noticeable decline compared to previous days and weeks, with many quotes now hovering around $6.25 per bushel. Proximity to Alberta’s feedlots continues to play a significant role as freight advantages are much more prominent in value determination. If that wasn’t enough, the concept of prompt movement has taken a backseat for the most part, as buyers are mostly looking at movement in September, October, and potentially extending to November. Barley is facing challenges due to the impact of corn imports and lower pricing, despite StatsCan’s report indicating a decline in barley yield to 55.3 bushels per acre, down from the previous year’s 70.4 bushels.
Holding onto a stash of maple peas? This would be an opportune time to reach out to your merchant, as buyers are actively seeking most varieties. Bids fall in the range of $19 to $20 per bushel and the occasional offer has triggered higher. Green peas are maintaining their ground, with buyer bids holding steady in the range of $14.75 to $15 per bushel FOB farm. The situation around grading remains uncertain and we’re still unsure how many green peas were left during the late season rains, which extensively affected most of the province. In the case of yellow peas, bids persistently linger around $10 per bushel, yet offers present an excellent opportunity to extract a bit more from the market. Considering that StatsCan’s average yield expectations indicate a drop of over 10 bushels per acre for peas compared to last year, there might be a glimmer of hope for both yellow and green varieties to experience some of the enthusiasm observed for maples.
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.