Analysts worry that fall movement of special crops and other minor crops could be hampered by the huge carryout of canola, wheat, barley and other major crops.
Peas and winter wheat are usually the first crops off the combine. Early season pea movement has been fantastic in recent years due to an un-congested elevator system.
Bulk pea shipments got off to a tremendous start in the first half of the 2013-14 marketing year.
Exporters shipped 1.06 million tonnes between August 2013 and January 2014, up from 909,600 tonnes for the same period the previous year.
That was a good performance considering the transportation problems.
But it’s probably going to be a different story in 2014, said Bruce Burnett, CWB weather and crop specialist.
“People are more reluctant to commit to exporting those (minor) crops in the face of having these (major) crops also available,” he said.
“It’s a matter of margins.”
Another marketing concern for yellow peas is that they are now priced at parity with chickpeas in India, which is the leading consumer of the commodity. Yellow peas are an attractive substitute for chickpeas for making flour when they are selling for their usual $30 to $40 per tonne discount to chickpeas.
Marlene Boersch, managing partner of Mercantile Consulting Venture, said the discount has evaporated because India is harvesting a sizable chickpea crop and there is a lot of poor quality product, which flows into the flour market instead of the whole chickpea market.
“Looking forward, in terms of depth of demand, these are things I might be concerned about,” she said.
But eventually she expects good demand out of India due to the developing El Nino that is threatening monsoon rains in that country.
“Our prospects of making some good exports are very, very good.”
Another factor to consider in yellow pea markets is supply. Boersch said there is a strong case to be made that Canadian yellow pea supply will fall in 2014 despite Statistics Canada’s forecast for a 21 percent increase in pea acres.
She believes most of the increase will be in green peas, which have maintained an unusually high $4.50 to $5 per bushel premium over yellow peas.
She thinks green peas will comprise 18 percent of 2014 acreage versus 15 percent in 2013. Yellow peas will fall to 80 percent from 83 percent.
Using five-year average yields Boersch can see a scenario where yellow pea production is 200,000 tonnes less than it was in 2013 and 2013-14 carryout will not be burdensome due to the strong export program.
She believes yellow pea prices will remain in the $6.75 to $7 per bu. range.
“I think peas are fairly priced right now,” said Boersch.
“That’s where they belong. I don’t see that changing very much unless we keep ratcheting up the yields.”
She thinks growers may produce an extra 100,000 tonnes of green peas than they did last year, which shouldn’t be too burdensome de-pending on what happens with U.S. green pea production.
However, it will likely reduce the green pea premium. New crop pea bids indicate a $2 premium for greens, which is more typical than the premium that exists in spot markets.