Canadian flax acres are expected to decline for the 2023/24 crop year; however, supplies will be slightly larger due to an uptick in carryover stocks, and we’ll need to see export demand increase for this market to recover. The US has been the main destination for Canadian flax with very small amounts headed to China. Russia and Kazakhstan are still dominating the Chinese market with their production. Pricing indications on flax sit around $14.00/bu picked up this week with very few buyers in the mix. These prices are frustrating for Canadian flax growers, but early reports suggest this could discourage planting acres overseas. While it is early, these reports show the first signal that declining prices and heavy supply could reset global markets. If there is a reset, it will likely be gradual.
For the most part, barley markets remain unchanged, with bids and demand stable for a few weeks now. Old crop feed is still triggering around $7.50 – $8.00/bu FOB farm depending on area and shipping window. New crop values continue to be quoted anywhere in that $6.25 – $7.00/bu FOB farm range, again subject to freight and shipping timeline. Growers with sales targets are highly encouraged to post a firm offer up. These prices remain a great starting point to get some product sold into. Recent rumblings over the past few weeks suggest that we will eventually see a price correction and values will fade. Although we hope that these are in fact just rumours, the reality of it is, if the market does take a turn for the worst, we could see substantial drops overnight as opposed to a, “slow leak,” over a few weeks. With what appears to be some decent snow cover throughout the prairies, locking in a percent of what you expect to produce this year just makes sense!
Canaryseed prices continue to hold firm and see little change week over week. Spot prices hold at $0.37-0.38/lb FOB farm, with the odd half cent premium for delivered product to various plants in SK. New crop continues to sit as one of the stronger production programs available, with multiple buyers looking for acres at $0.34-0.35/lb for FOB farm. With fall movement options on new crop, this continues to be a program that has the ability to generate quick cash flow throughout harvest. Looking at Canadian and world markets, forecasted Canadian acreage still sits around 300,000. The first half total for 22/23 exports amounted to 102,000MT, which is up from last year’s 83,000MT. Additionally, CGC is reporting farmer deliveries to elevators above average, but in line with the 5-year. Despite steady movement, continued discrepancy on Mexico’s trade data has some believing Canadian canary supplies could be larger than it seems. With steady bids and strong exports, the market appears to be balanced and the current price environment could hold for some time.
The wheat market has paid close attention to the expiry and renewal of the Black Sea Grain Initiative over the past several weeks. The deal was extended for 60 days, half of the intended time wanted by Ukraine. Reports suggest that Moscow would only extend the agreement to anything longer than 60 days if Western sanctions were removed. Additional news in world wheat: the U.S winter wheat crop remains under stress and offers opportunity for Canadian prairie farmers. With a large area of winter wheat under, “extreme to exceptional,” drought conditions, increased wheat acres in Canada could help offset reduced U.S. production. Looking at local markets, spot trading for CWRS 12.5 pro sits around $11.00/bu delivered SK. Old crop spot trading for durum has slowed down, with some buyers’ needs full for the time being. Some have dropped durum spot prices to $12.00/bu delivered, while a few continue to buy just shy of $13.00/bu delivered. New crop durum has seen little change, and values still sit around $11.00/bu FOB in SK. Feed wheat values range from $10.00-10.50/bu FOB, and $10.75/bu delivered Lethbridge. New crop feed values into Lethbridge sit around $10.30/bu.
Spot pea pricing is a little all over the map this week, but the “top dogs” are maple peas, which are trading anywhere from $17 – $18.50/bu picked up on the farm depending on location and variety. Sliding into second place we have green peas, which are trading at $13.50 – $14/bu picked up on the farm; freight will be the biggest detractor. Finally, we have yellow peas tailing the group with bids on the west side of Sask currently quoted at $13/bu delivered in. Eastern Sask yellow pea bids are seeing values closer to $11.25 – $11.75/bu; however there has been the odd grower target triggering along the southeast SK/MB border at $12.50/bu for late spring/summer shipping. New crop pea programs remain largely uninteresting to growers, but we do have a specialty program in Southern AB at $14/bu delivered with an AOG. Call your merchant for details! Sask bids are sitting a bit softer, quoted around $12/bu delivered in with an AOG. New crop green and maple pea trades have been quiet with bids ranging around $11 – $14/bu depending on location and variety.
The oat market remains quiet as most buyers are mostly covered until fall. Looking through data from StatsCan may provide a good explanation on why the market is so quiet. The supply numbers tell the story; in December, stocks were pegged at 3.6MMT, up 91% from a year ago and the highest on record. In addition to the huge supply, the export market has also seen a downturn providing the perfect storm for this lackluster market. Expected ending stocks are pegged at 1.2MMT, which is 4 times the 2021-22 carryout and just about double the five-year average. This amount of carryover will take markets a while to work through. The upside in all of this is that acreage is pegged to see a minimum reduction of 30% and possibly as high as 50%. Alas, even with this large reduction in acres, average production numbers could still set next year’s supply 6% higher than the five-year average, and would put some pressure on pricing to start the 23/24 crop year. Patience is going to be key going forward as there is a lot of product to move and not many places to move it. Bids this week have been as high as $3.70/bu in the right location for #2 oats and as low as $3.40/bu for feed. All bids are quoted as FOB farm with movement for as far out as July.
Chickpea exports out of Canada maintain strength in the first quarter of 2023. Speculation of increased acres in both Canada and the US still leave a bullish tone as there is concern of steady supply chain availability. Reports of less-than-ideal crop conditions in Mexico and producers planning fewer acres support that bull. Conversations around new crop production contracts are far less frequent than expected and have the trade wondering if the increase in acres will be as aggressive as anticipated. Old crop #2 large Kabuli bids sit around $0.50/lb FOB farm, give or take a penny or two for April-May movement, with new crop bids generally at $0.44-0.45/lb, with a few outliers at $0.46/lb FOB farm with an AOG. With all the talk of big acres, putting something on the books may not be the worst idea one can make. Feed values slipped a little with bids now quoted around $0.30-$0.35/lb FOB farm. Pet food is a wild card though and when demand peeks, prices can jump significantly. Get on our email/text blasts for sudden shifts in the market to be first to know.
Canola markets have been seeing day after day losses over the past half month. We have seen May futures come down from $820/MT to, at time of writing, the current level of $722/MT. That’s a loss of over $2.22 cents per bushel in 16 days… not pretty. Why is this happening you ask? It’s a multitude of reasons all adding up: soybean markets are a big cause as they have fallen a matching timeline due to expected increases in production from South America; acres and production for the upcoming canola crop are expecting increases; word that changes in US biofuel rules would reduce markets for Canadian product don’t help, and talk that Canadian product is too expensive to compete in the EU veg oil market all seem to be partial factors. Basis levels in the province are still showing wide discrepancies from north to south, and east to west, so it is best to shop around for the top opportunities and make sure you are getting the top dollar on the day.
New crop mustard bids have fluctuated a bit this week and we’ve seen some buyers step up to the plate to book product a little higher than the mid 60 cent/lb range we’ve been seeing lately. Spot markets remain fairly flat, but still strong historically and worth taking a look at. Spot values remain around $0.90/lb for yellow mustard, $0.78/lb for brown, and $0.82/lb on oriental. It is very important to talk to your merchant as these prices fluctuate daily depending on the needs of the buyer. New crop pricing remains in the $0.66/lb area for oriental, brown possibly at $0.70/lb, and yellow also in the low $0.70’s today, all including an AOG for full crop year movement. Seed sales are wrapping up and our supplier has begun treating and packaging. There may still be a chance to book some last-minute product at this late stage, so talk to us if you are in need. We have found room on delivery trucks in some cases.
Lentil markets remain stable this week, which is good news as prices are attractive and worth a good look. Expectations for the coming year are that lentil acres will fall by at least 5%, with the majority of that loss representing red lentils. The trade appears to be bullish green lentils due to concerns over India’s pigeon pea crop. Getting into the numbers, #2 red lentils are trading at 35.5cents/lb delivered to various plants for old crop, while new crop is at 32 cents/lb FOB farm with an AOG on 10 bu/acre. Standard #2 large greens are trading in the 53-54 cent/lb range FOB farm for old crop. New crop large greens have been getting booked up steadily at 48 cents/lb FOB farm with an AOG for a #2 quality. These contracts pencil out nicely and can have a 5-10 bu/acre AOG. Old crop small greens aren’t too far behind with contracts available for 50 cents/lb FOB on a #1 quality. New crop small greens sit at 43 cents/lb FOB farm for a #1 with an AOG as well. As commodity markets take daily losses, these lentil values become even more attractive in ensuring profitability on the farm.
Soybean futures have taken another step down in large part due to near record Brazilian production forecasts. Local bids are still holding up quite well at $18.25-$18.75/bu FOB farm location dependent. Local dry bean bids in Mexico have shown promising increases due to lower production. New crop dry bean contracts are available with price points ranging from 46¢/lb on higher volume more common classes to 70¢/lb on specific specialty classes. Canadian faba exports have been light, largely due to competitive export pressures from countries such as Australia. Australia is reporting their 3rd largest faba crop in the last 10yrs. Feed quality fabas continue to be supported by pet food values. Local bids with export quality #2 faba bids being in the range of $13.50-$14.00/bu FOB farm and feed quality values are near $10.00-$10.50/bu FOB farm location dependent.
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