The special crops trade is far from immune to the maelstrom of the weather markets sweeping through the industry.
Add a dash of uncertainty about how the Asian currency crunch and economic sanctions against India will affect demand, and price outlooks become even more clouded.
Here is what some observers expect may happen in some of the special crops markets.
Lentils
Farmers are planting about the same amount of lentils as they did last year. But they’re turning away from Lairds in favor of Estons, Richleas and the new red varieties.
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Last week, new-crop bids for No. 1 Lairds went up to 17 cents per pound, said Francis Gaudet, buyer for Belle Pulses at Bellevue, Sask.
Bids for all varieties of lentils have been in the 15-cent range lately, said John Duvenaud, who writes the Wild Oats markets advisory.
“There’s no big premiums out there in the new-crop markets.”
He expects a big shift into red lentils because they were going for 30 to 35 cents per lb. over the winter, when Lairds and Estons were mired around 15 cents.
“That’s one where we could have an oversupply situation arise pretty quickly,” he said, explaining there’s only a niche market for red lentils.
Forward sales for new-crop lentils are well below normal levels, said Marlene Boersch of Berdex Canada Ltd., a Winnipeg-based special crops exporter.
Boersch explained mild winters across the world cut demand for pulse crops, especially by canners. Pulses are seen as a cold weather food by importing countries.
Buyers weren’t forced to keep buying lentils, and that attitude has spilled over into the new-crop market, she said.
“If we do have a crop problem, none of them are covered, and they will all still have to come (to buy), which is good,” she explained.
Prices could reach the long-term average price of around 18 cents per lb.
“I must say, I enjoy it being at that level, because it covers farmers’ production costs quite nicely, and there’s a lot more joy in the trade that way,” said Boersch.
Mustard
Saskatchewan and Alberta farmers intend to plant about 700,000 acres of mustard, roughly the same as last year.
But most mustard is grown in the driest areas of the provinces, said Duvenaud, and farmers are holding off planting the small-seeded crop.
“There will be thousands of acres being lost to that crop every day,” he said.
New-crop bids for brown and oriental mustards have been in the 16 to 17 cents per lb. range, he said.
Because they’re used for oils, prices over the winter will be tied to the fortune of the larger vegetable oil complex, which so far looks reasonably firm, said Duvenaud.
Over the past five weeks, growers have cleared a lot of mustard off their farms, said Elwood Lawrence of The Mustard Bin in Regina.
“There is not the heavy carryover out there that we were experiencing, say, in January or February,” said Lawrence, explaining producers gave up on hopes for higher prices and sold their mustard.
He expects fewer acres of yellow mustard than last year, when growers turned to it in droves because of 46-cent prices during the winter of 1996. Too much supply resulted in contract prices around 22 cents and spot prices around 18 cents last year.
Current spot prices for yellow mustard are between 19.5 and 20 cents per lb., said Lawrence, who is a broker between growers and about five major mustard companies.
