Much like the weather, the barley market remains hot. Old crop feed values currently hover around $7.50 – $8.00/bu picked up on the farm for August movement. Prices will differ depending on the area, but regardless, these are great values. We suspect there is not much barley left sitting in storage to date, but if you have some bin bottoms left on the farm, now is the time to pay the neighbour kids to come shovel. New crop barley is still trending at $5.50/bu on the farm with pickup for earlier movement, and if this price doesn’t quiet do the trick for you, call in and throw out a firm offer. This does not necessarily mean that it trades at a higher value, but demand is strong and to quote an unknown source, “you never know, unless you try.” Although the new crop values do not come with an act of God, it may be late enough into the growing season now that you have a pretty good handle on what you can expect to bring in off the combine. This should alleviate some of the risk or stress of entering into a DDC contract.
As the majority of Canadian crops continue to experience a heatwave and lack of moisture, so do US crops. Domestic pea harvest will be occurring earlier than normal this year and has already begun in some of the northern states, such as Montana. After reports of a decline in green pea acres and now reduced yields, we see more demand and strength in green pea values. Expected yields have been cut back for all peas and we anticipate that supplies will be short this marketing year; likely boding well for pricing on all types. Old crop bids for yellow peas are indicated at $10.00/bu FOB with new crop at $9.50/bu FOB. Green peas are trading at $10.00/bu FOB on old and indicated as high as $10.50/bu on new crop. Maple peas are still quiet with bids around $9.00/bu on old and new with very few buyers coming to the table.
Canary seed production, like most other crops, is taking a hit on potential yield outcome. Earlier in July the canary crop was rated at 18% good to excellent and we have not had much favorable weather since, which means that percentage is likely reduced. On one hand we did have an increase in canary seed acres, however, these reduced yields will likely tighten supplies for this marketing year. Right now, old and new crop bids remain historically strong at $0.37/lb delivered plant; values we haven’t seen in ~20 years. We can expect that there will not be much downside in pricing, however we will have to see how much upside potential there is if demand is scaled back.
Flax prices remain solid as we move another week closer to harvest. There are buyers who still have room for old crop with indications up to $24.00/bu FOB and moved within the next couple months. New crop bids vary depending on movement timeframe, but prices can be found starting at $19.50 -$20.00/bu picked up, still with an act of God. With low carry-over supplies, there hasn’t been much flax moving into the market as of late and deliveries are well below average since April. On the flip side, stocks have been sitting at the West Coast, likely heading to China, which means there is still some buying interest before new crop comes off. What new crop yields will be remains a guessing game, but we don’t think anyone expects a bumper crop. Conditions continue to change but demand still needs to be filled. You will likely see prices continue to be historically high for the near future as we move forward.
Wheat markets see continued strength this week based on poor crop conditions throughout much of North America. On the feed side of things, you can expect to see values in the $9.50-$10.00/bu range FOB pending location. That said, with the recent strength, growers are encouraged to use the offer system to try and capture values slightly higher. The strongest bids remain to be seen in SW Sask. and Alberta as you move closer to feedlot alley, but buyers are looking for whatever they can get their hands on, meaning those in NE & SE Sask. need not worry. Milling wheat markets have also seen prices strengthen up this week, now indicated around $10.25 to $10.60/bu delivered for 13.5% protein product. The durum market is not left on the sidelines either and has been exploding this week. Prices seem to be all over the board, but bids are strong, and we’ve heard reports of $12-$15/bu available. If you do have some in the bin or in the field and are looking to market it, the best thing to do is to show your Rayglen merchant and they will get you a firm value in your yard.
Chinese soy demand is temporarily waning largely due to diminishing margins for Chinese soy crush facilities. Chinese buyers have partially opted for cheaper feed alternatives for the country’s large hog herd. This has caused traders to pause and, at times, has created some short-term softening in the Chicago soybean complex. The weakening Chinese demand is offset by global supply concerns in both Brazil and the US Midwest. Both have suffered from drought conditions in particular production regions. Bids are muted and buyers are asking for firm offers from sellers. Old crop fabas are trading between $8.50-$9.00/bu FOB farm, location dependent. New crop #2 export quality fabas are hovering right around $8.50/bu FOB farm. It’s estimated that dry bean acres in Canada and the US have decreased 18% and 13% respectively. Larger carryover inventory will not be enough to compensate for lower production and thus overall, 2021-22 supply is expected to decrease. Markets remain well supported predicated on export demand. Many are wondering when or if poor crop condition ratings will begin to factor into local price.
A reduction in seeded acres, diminishing carry-in and sliding yield prospects have the 2021-22 oat balance sheet tipping towards historically low levels. South of the 49th parallel, seeded acres are down 20% and expected harvest area is approaching a 30% decrease. US total oat production is anticipated to be down 37% year over year. Old crop milling demand is currently thin as millers largely have their programs covered. That said, they too have concerns about general supply with new crop bids being $4.25-$4.50 bu delivered in the eastern Prairies region.
Canola futures remain solid this week, but markets have seen some declines since yesterday’s close. At time of writing, November futures are down just over $36/MT with January not far off seeing a $30/MT fall. The majority of fragility is derived from the weakening soy complex, but scattered showers throughout the Prairies on Tuesday have likely helped to ease values as well. Currently, November sits at $874/MT with January only slightly lower at $860/MT. Local basis levels remain strong with indications on spot purchases still at $25/MT over for July/Aug., putting bids at roughly $20.50/bu delivered plant. New crop basis levels have shifted to $5/MT under for Sept./Oct. and $5-$15/MT over for November through March. This puts new crop bids in the $19.50-$20/bu range delivered plant. Values are historically strong and likely to stay as such until production hits the bin at which time the market will reevaluate supply and take direction.
The lentil market is very quiet on the selling side, even with buyers having some interest in purchasing. The red lentils market is the quietest of all the markets, this is likely due to the tonnage limit in India. Prices are ranging from 32-34 cents Fob farm. Buyers seem to have a bit more of an appetite for the large green lentils with price ranging from 36-40 cents Fob farm. Small green lentils are trading in the 34-35 cent range. Medium green lentils are trading in that 33-34 cent range. Going into August, reds likely will remain flat to start the month off but may strengthen as yield reports come in. There is usually strong interest right off the combine for any green lentil as buyers want to book up and ship number 1 lentils right away as not to lose colour by shipping later in the year. Prices seem to vary from plant to plant and are changing rapidly, so leave the price discovery up to the merchants at Rayglen and you worry about harvest.
Mustard prices are again showing strength over the past week. With carryover tight, and crop conditions, there is no change to the tight outlook and prices remain strong. All types of mustard are included in this rise. Yellow mustard is trading at 54 cents FOB on both old and new crop, and it could possibly trade higher for full crop year movement. Brown mustard sits at 44 cents FOB and new crop goes even higher to possibly 45-46 cents for full year movement. Oriental Forge and Vulcan mustard go up to 37 cents FOB for old crop and new pushes to at least 38 cents. Cutlass sits at 36 for stuff in the bin and as high as 38 cents for full crop year on new crop. These prices are obviously at yearly highs and new crop is still available with an act of God for the time being. Good opportunities!
The chickpea market seems to be stronger, yet it’s not really making a racket about higher prices. We have had a few trades go through at 37c/lb FOB farm to 38 cents delivered on #2 large Kabulis over the last week, but by and large most sellers are in no rush as bin space is not at a premium this year. New crop prices on chickpeas are fairly similar with buyer interest at 37 cents, which should still include an act of God clause. Crop reports in recent weeks have surprisingly not fallen off drastically from the early positive conditions on chickpeas to the more recent very negatives. We are most likely passed the point of anything really helping this chickpea crop increase production, but quite possibly, cooler temperatures and smoke coverage might have lessened the complete losses. All in all, we do not expect much production on chickpeas given the weather conditions that most of the Canadian chickpea growing areas have experienced.
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.