The pulse of pea and lentil markets might be weak for the next couple of months.
But analysts say the crops are setting seasonal price lows now, and with some strong marketing and a bit of luck, exporters should be able to move a big chunk of the supplies.
A record-setting early pea harvest, matched by smooth progress in lentils, meant the fall shipping season was longer, said Brian Clancey, of Stat Publishing in Vancouver.
In comparison, last year’s late harvest and shipping snarls caused trouble for exporters trying to meet commitments.
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“In that sort of a situation, you have a very volatile and excitable spot market,” said Clancey.
Canadian farmers grew a record-large crop of peas this year, beating 1995 production by about 100,000 tonnes, Clancey said.
But while exports topped one million tonnes in 1995, Clancey expects less than 930,000 tonnes to leave the country this year.
Brad Fowler, a pea merchant with United Grain Growers, said demand has been a bit stronger on the edible side because of dry growing conditions in Australia, a competitor.
While farmers have been delivering edible peas, they’ve been holding on to feed peas in hopes of better prices in the second half of the crop year, he said.
But northern European customers have been buying fewer feed peas because of a plethora of cheaper local feed ingredients, including feed wheat and pelletized screenings, Fowler said.
An outbreak of hog cholera disease in the Netherlands, where peas can make up a big portion of hog rations, has also killed off some demand for feed peas.
French and Ukrainian feed peas are also giving Canadian product a run for its money, said Fowler.
If Statistics Canada production figures are correct, pea exporters will have to make a lot of sales to avoid a sizeable carryover, he said.
“We would have to do a really good job of exporting in the last half of this year, at the rate we’re going right now,” said Fowler.
Clancey said the livestock feed side of the business will support pea prices, preventing them from going much lower than current levels.
But lentils set record price lows at the dealer level last week for the history of the crop in Canada, said Clancey, reaching U.S. $14.50 per hundredweight in Montreal for No. 1 Lairds.
Growers have been protected from record lows of 10 cents per pound by currency exchange rates and competition between dealers, he said.
Currently, grower bids are around 14 cents per lb.
Buyers not stockpiling
Lentil export customers are buying hand to mouth because they know Canada had large carry-in supply of 100,000 tonnes, adding to production of about 390,000 tonnes.
“The buyers have been right for 12 months, so they’re on a roll right now: they think that they’re always going to be right,” said Martin Chidwick, of Xcan Grain Pool Ltd.
Chidwick said farmers have been reluctant to sell their lentils at current prices.
“It sticks in the craw a bit when you can remember 25 cents (per pound) for lentils, you can remember 30 cents for lentils, and here you are at 12, 13 and 14 (cents per pound),” he said.
And he doesn’t see much excitement on the horizon to cause prices to swing upward.
“We’ve got to look for windows of opportunity to market product right now because the normal bread and butter demand is minus the butter,” he said.
