The pea market is a little weaker recently as buyers overseas are not aggressively looking for product and the Indian tariffs hold a cloud over the market. This is not to say our weak prices are caused by the tariffs, but they are an extra hurdle to the oversupply the world is seeing on pulses right now. Current price indications on #2 yellow peas are around $6.25/bu as a delivered to plant price for now and the in the fall. The green pea market is holding a solid premium to yellows at $8.25/bu delivered to plant for the fall. Crop conditions are still holding up in most areas of the province on the pulses, so short of a wild start to august we will likely have a decent crop in the bin shortly.
Finding a home for chickpeas this marketing year may be an interesting story. So far, most chickpea growing areas seem to be doing well and depending on the weather we should have an average growing crop year. However, the increased number of acres are going to have us looking for a home for about 360,000 tonnes. Considering other years and reading through Stat reports our export programs have been less than half of that tonnage. The US is our largest buyer of chickpeas, but their crop ratings are also looking favorable for chickpeas and they have doubled their acres from last year. Therefore, turning to the 2018/2019 marketing year we may not see much price increases from the 25 cents per pound, we currently have, on a #2 or better quality.
Canadian 2018/19 oat crop condition thus far is showing 20% Fair, 63% Good and 14% Excellent. There is still a lot of milling quality old crop in the bins that is part and parcel resulting in the flat market. The opportunity for loading producer cars has been falling off as the mills are reporting full on reserve supply and show no demand for buying. The USDA is forecasting the oat production to increase by 35% over last year to a .964 MMT. While MB and SK grow superior quality, the US is keeping their buying in country until there is a “need”. No one is taking long positions as buyers are finding it difficult to find homes as they are forced to trade on razor thin margins. A small glimmer of opportunity, though where heat and weather have decreased the hay production in south Sask. we could see more demand in the feed market in the coming months. #2 CW values remain flat from last week $2.20/bu to $2.40/bu FOB farm pending location and feed oats coming in around $2/bu or slightly higher.
Agriculture Canada thinks tonnage will reach 195,000 MT based off 503,000 acres of mustard planted in the 2018 production year. This tonnage is up considerably compared to last year which was only 122,000 MT based off 385,000 acres. Despite the increase in acres this year, prices have really been staying the same as of late even as there has not been much demand overseas our old crop stocks are tight. Production contracts on yellow mustard are around 33 cents, 32 cents on brown mustard, and oriental at 27 cents/lb. On old crop; brown mustard has slipped a little, trading around 32 c/lb and yellow has been around 33 to 34 c/lb. Old crop oriental has been quiet and has been sitting around the 27 c/lb mark. The market can be fluid, so if you are looking for the most up to date pricing and movement, it is best to call the office and speak with one of our merchants.
Wheat and Durum prices have been mostly sideways this week. The weather has continued to be challenging across Western Canada with spotty rainfall and temperatures above normal. Some reports from analysts is that the cereal crops are shorter this year in some areas. Although crop height does not translate directly into yield, it is an indication of the overall potential. There are also some reports of the lack of fill on the smaller heads. That aside, futures have backed off 5-7 cents this week. The US is likely to continue tariff battles around the world, which in turn has already influenced prices. What this all means and the ultimate impact on grain markets is still anyone’s guess. #1 Quality durum for a Jan-Mar 2019 movement is in the $7.20/bu range in southeast Saskatchewan, unfortunately the bid does not extend across the province. For those with lower quality or feed in the bins, selling it before new crop comes off is still a good play.
Flax has had another flat week in the as buyers are quiet on the purchasing side. Buyers don’t have much information to tell us on flax other than there is very little for trades taking place in the milling markets but there seems to be interest in the oil markets. Flax is seeing more price pressure from other producing countries such as Kazakhstan which is reporting more flax stocks than expected and new crop looks in good shape. The U.S. crop also looks good which is hampering their local bids, although we are not seeing it affect the markets north of the 49th likely due to decreased acres in the US. The local concern for the Canadian market is how much is left in the bin. Until the market gets a better handle on what is really in the bin compared to what is being reported, we likely won’t see much for a price change. Overall feeling is this that flax likely will see some improvement as we go further into the winter season as stocks become tighter.
This week we are seeing a pop in the barley market. Buyers are wanting to get some coverage in the market before we get into the colder temperatures. There is also starting to be a bit more demand for new crop barley in the areas that are very dry and will not have much feed for the winter. New crop prices are starting to creep back up around $3.70-4/bu picked up in your yard for movement before Christmas time, and up to $4.25/bu for movement into early 2019. There may even be some opportunity to still get an Act of God if you are in the right area. Offers are a great way to show the buyer what you are looking for so don’t forget to talk to your merchant on those.
Canola markets traded choppy this week from as high as $495 down to $485, settling in the $490 range mid-week. On the down side, basis continues fairly wide this week. We are seeing basis levels ranging from 35 to over 50 in some cases. However, a low ranging Canadian dollar remains a supporting factor, making canola more attractive to foreign purchasers. European dryness has crept into wheat pricing but has not affected EU Canola bids yet. The weather market is likely something to be monitored over the next couple of weeks, to see if this changes futures pricing a bit going forward. Bids delivered to plant vary widely depending on location, but range generally from $10.50/bu delivered to slightly over $11.00/bu for July/Aug movement. Please contact your merchant for a firm bid delivered to the plant, FOB farm or to put in your firm target.
Soybean futures have shown a steady small increase since July 16th. Recent news of the US $12 billion-dollar farm support program has continued to keep wind in the soybean sails. The most recent USDA crop progress report pegged the nationwide soybean crop at 70% good to excellent as of Sunday, up a single point from a week earlier and 13 points better than a year ago at this time. 44% of the US soybean crop was setting pods as of Sunday, up from 26% a week earlier and roughly a week or 21 points ahead of the average. Spot soybean bids now hover in the range of $9.50/bu picked up on farm. Faba bean prices on the zero tannin types remain about in the low to mid $6/bu range as a picked up at the farm price depending on where you are located.
Lentil crop conditions in Western Canada are projected to generate solid yields and earlier dryness may have helped alleviate disease pressure. Between large old crop carryout and lower new crop seeded acres but average production, it’s expected that lentil carryout will be static to last year. When demand evaporates as it did with India and domestic supply stays the same, then price usually trends downward. Unfortunately, those are exactly the market conditions for lentils for the foreseeable future. Old crop and new crop prices have converged given how close we are to harvest. Red lentils are in a 14.5-15 cents/lb delivered price range, large greens 21/19 (#1/#2) FOB farm and small greens 19/18 (#1/#2) FOB farm.
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.