Canaryseed prices are climbing but growers continue to sit on the fence.
Bids have been as high as 17 cents per pound in recent weeks, a far cry from the 10 cents per lb. buyers were offering in the summer. But little crop is moving.
Canaryseed Association of Canada president Ken Schikowski expects farmers will hold out a little longer.
“There were a number of guys at Agribition saying, ‘as soon as it hits 20 cents, I’m going to sell,’ ” he said.
Steve Foster, special crops trader with Saskatchewan Wheat Pool, has heard that kind of talk before. Earlier in the 2006-07 marketing campaign growers said 15 cents per lb. would be the trigger, and then 17 cents. Now 20 is the magical number.
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“We’ll call it an up market and not a lot of guys sell in an up market,” he said.
If growers intend to sell at 20 cents they could be in for a long wait. Foster said prices started going sideways lately and may even be declining.
“There is not a lot of nearby demand on canaryseed to warrant those kind of values,” he said.
Mexican buyers bought a few spot cars but have since been scared away by the soaring prices. Demand from Europe won’t materialize until April or May, so there isn’t much incentive for Canadian traders to aggressively source product.
“If you buy the stuff today, you’re sitting on it from now through until next spring and not many companies can afford to do that,” said Foster.
Schikowski countered that canaryseed prices are not driven by demand so much as supply and this year’s production was a paltry 118,000 tonnes, about half the size of last year’s crop.
Due to a large carryover, total supply on hand was an estimated 308,000 tonnes as of Aug. 1, which is more than enough to meet annual exports in the 160,000 to 180,000 tonne range.
But buyers have worked their way through much of their stocks and are now having a tough time luring additional crop held by producers.
“Farmers have locked the bin doors for a while so it has forced them to pay a little bit more to get them to start to sell,” said Schikowski.
He figures buyers will have to keep prices above 16 cents per lb. to buy acreage for next year’s crop considering how attractive wheat and canola are looking.
Foster acknowledged he would like to see 450,000 acres of canaryseed in 2007, a 46 percent increase over the 309,000 acres seeded in 2006.
But if growers are holding their breath for 20 cent canaryseed, they may turn blue in the face because traders are already halfway through the 2006-07 export program and buyers simply aren’t willing to pay those prices.
Schikowski thinks 20 cents is feasible, especially if the Canadian dollar depreciates as some analysts are forecasting.
