JULY 2014

July 2014

****Rail service continues to be awful.   We have received 3 cars in 3 weeks at our plant (we ordered 15) – CP is not being helpful in advising future service****
****Tensions between truckers and their respective owners / port /  government continue to simmer in Vancouver.   They have the potential to boil over at anytime****
Market notes, what to watch for:
1) Canadian Dollar remains relatively strong compared to past 4 months.    Expectation is to have it weaken 2% in the next few months potentially lowering prices.
2) Old Crop Lentils appear to be largely sold out but there also has been VERY FEW new trades to determine the actual market prices.    Grower price indications:  Reds O/C $26, N/C $22, Lairds O/C $20 cents, N/C $21
3) Weather is very extreme.   West Saskatchewan = dry and 40 degree heat.   East Saskatchewan = flooding, 40 degree heat, thunderstorms.
There is losses of acreage and yield for sure.   But the acres are big.   It has largely frozen both buyers and sellers.
4) India is having trouble planting its new crop.   Should keep demand firm, but price increases are far from guaranteed.
5) Transportation issues continue.  Rail is still a problem, we are receiving about 20% of railcars ordered.  Truckers continue to threaten strike action in Vancouver as unrest between the trucking companies, the port, and the truckers continue to simmer.
<GENERAL MARKET TONE>
It seems that all players are willing to stick with the trades that they have made.  While there is interest in the market, no one is willing to chase the market up or down.   There is a lot of fear about potential crop trouble along with continued logistics trouble.  Most growers have sold something, and most buyers have secured some product to guarantee movement and basic pricing.    Therefore, everyone is willing to wait and see what happens in August.   In my opinion it is likely that markets will stay in a tight range through December and will be highly influenced by the trade’s ability to ship and the pressure India eventually applies to the market or not.
We will continue to try and balance market prices and logistics.   We expect a continued struggle to ship our order book in a timely way for the next several months.   Our strategy is to let ‘July happen’ and re-evaluate the market and begin selling again during the first half of August when conditions and ability to ship are more established.
Have a great summer.