Winnipeg, March 29 – Canaryseed is suffering from weak demand and that’s reflected in lower prices, one industry specialist says.
Demand for canaryseed is down about 20 to 30 percent, said David Nobbs, chair at the Canaryseed Development Commission of Saskatchewan. He doesn’t expect the issue to be resolved soon.
“Weeks turn into months and months turn into quarters, and the lack of disappearance of product is weighing on the market.”
The rallying Canadian dollar limited exporter ability to stimulate demand by dropping the US denominated price, he added.
Earlier in the year, when the loonie was at its cheapest level since 2003, grower return was about 27 cents per pound.
But the loonie has now strengthened from those lows.
“It flip-flopped the other way,” Nobbs said. “It’s coming right out of the grower price.”
Canaryseed spot prices are now about 24 cents per lb.
The dollar rally is not the only reason demand is sluggish.
“There’s virtually no new crop business on the books, which is unusual,” Nobbs said. “Buyers are just not forward buying it.”
Canaryseed was oversupplied at the end of the last crop year, as marketers pulled demand forward on drought-concerns, causing the market to rally to 30 cents per lb.
Now the market is sufficiently supplied, and buyers have gone from being speculative to slowly grinding through purchases in a market that’s steadily moving lower.
“People start to wonder, buyers start to question the values that canaryseed is at,” Nobbs said.
Current prices are still fair, Nobbs said, but he doesn’t see those values holding, even at the relatively weak 24 cents per lb. level.
“There is no demand. In fact, in 13 years I don’t even know if I’ve seen it this slow,” he said.
Looking to the growing season ahead, acres are expected to edge down slightly, according to early estimates.
Agriculture Canada forecasts canaryseed area will fall to 321,000 acres this spring, down from 326,000 last year.
“We’re going to lose acres on one side of the province, we’re going to gain acres on the other side,” Nobbs said.
Saskatchewan grows nearly all of Canada’s canaryseed.
Nobbs expects acres will fall in durum growing areas, predominantly eastern Saskatchewan, but advance in wheat growing areas, which are mostly in the west.
“The euphoria over lentils is also going to take some acres from canaryseed,” he added.
