Here Comes the Sun

A frost scare in early August has relented to 10 days of perfect harvest weather in South Saskatchewan.   We are seeing all of the risk money coming out of the markets as the first combines hit the fields.  Early indications are showing better quality and higher yields that expected in peas and red lentils.   Quality and yields will change as the crop moves north over the next several weeks.    There is a lot of variation within Saskatchewan growing areas, but the market will move back and forth as producers and buyers assess the progress of the crop.    I do not expect growers to bring the markets down dramatically, but the tone of the market will remain in the hands of the buyers as they seek to cover their initial yields as cheaply as possible.

Lots of opportunity this week.   Looking forward to being a Canadian selling good quality merchandise at good prices.

 

Have a great week.

 

 

 

Weekly Wrap Up

Here is a quick summary of this week’s market.
Global commodities have been bearish, buyers scarce.   Most products are at lowest levels since 2007.   The main problem is that the prospects for sales are very limited.   Ramadan is ending this weekend.  It should bring 1/2 of the world’s pulse buyers back into the market Monday morning.   I do not expect an immediate change but, it should be the start of bringing much needed demand to the market.  Or at least add another piece to the puzzle
In general growers are still selling.
Lairds => Virtually no export market.    Some #1’s sold = $775 CIF.   Laird 2’s should be $650+ CIF, but the only bids i can find in the market are equivalent of about $600 CIF for immediate shipment of distressed product.   While this sucks, it does provide some ideas of the bottom and direction of the Laird 2 market.    Current distressed stock bids = $600 CIF,    Future Exporter bids to growers = $625+,  Grower selling ideas $675+.   This is happening with virtually zero market participation and many people in a bad position.
Demand is limited, and the lentil is market is priced to reflect an excellent crop.    Improved future prices are being held by most growers and some exporters.    I assume demand will come as there is almost no new crop sales on the books.   Any bad news about new crop production will also be a positive to the market.    I expect Laird 2 = $675-$720 CIF Prices by October.
Peas =>  Everyone is trying to buy at yesterday’s prices    I have not been able to find another green pea seller.    Yellows are quiet due to issues in India.   The expectation is that they will start soft (8/bu, $500 CIF) and improve as stocks get used up throughout the year.
Canary=>  this is a funny market.   hot and cold.   Acres should be way down, but growers are still willing to sell limited amounts of product.   Buyers are also not rushing in to cover positions.   My feeling is it will stay this way (about $825 CIF) until the shortage is felt in early 2014.
Have a nice Week

Transition to New Crop

It is mid-august and it feels like the pulse market has hopped on a bus with a drunken bus-driver.    Might be OK, maybe we will get home safe, but there is a lot of good reasons to be worried.    The market is a mess and it has been difficult to figure out where this ride will go next.

Crops are largely green and late.   Overnight temperatures are approaching freezing, but are unlikely to cause any damage this week.   Rain is occurring enough to prevent the crop from reaching its final stages of maturity.   Disease is substantial in many fields, but not enough to cause wide-spread damage.

Many farmers tell me there is still potential for a bumper crop along with a very real potential for a big quality mess (think immature seeds and wrinkled grains.)

It looks like the only choice for most everyone is to wait and see what gets harvested in early September.   Many commodities are their lowest values in 4 years.     Carry over stocks are much lower than previous years, and current crop risk is not priced into the market.   In September,  I expect to see some pent-up demand, but that will directly contrast to many sellers anxious to compete for sales.

My opinion is that it will be difficult to push pulse growers much lower than the current spot market.   Harvest tends to disappoint, rather than delight in yields and quality.   I feel strongly that 2013-2014 will transition to a buyer’s market.    We will likely see the farmers more willing to give up favourable terms to get their minimum prices to cover costs.   This will be more of the trend rather than seeing big price depreciation, simply because we are in the bottom 25% of farm-gate prices.

It will be a bumpy ride, those with a weak stomach should move to the back of the bus.

Have a great week.