Poor growing conditions abroad, coupled with short supplies of peas and lentils means prices will be up this year
Larry Weber was concerned that pea and lentil growers wouldn’t be able to fit their horns through the doorframe after hearing his market outlook.
“I’m bullish pea and lentils, but I don’t want everybody’s head to get too big,” he said.
His bullish sentiment stems from the record pace of Canadian exports and poor growing conditions in India, Turkey and Australia.
“We’re going to be out of product by June,” Weber told delegates attending CropSphere 2015. “There is no reason for prices not to escalate from here to the end of the crop year, with the exception of the economy.”
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A story in the Hindu Business Line echoes Weber’s bullish outlook, noting that markets are abuzz with speculations of India’s import volumes given that winter pulse plantings are 10.5 percent below normal.
“A trader in Canada told Business Line in confidence that many traders, including some in Singapore, Dubai and USA are positioning themselves by buying up whatever yellow pea and red lentil is available from Canada. They expect India to buy up everything,” stated the article.
Canadian pea shipments are already 150 percent ahead of the long-term average.
“Exports have been nothing short of phenomenal,” he said.
Weber sees ending stocks of 100,000 tonnes, or one-quarter of the 10-year average. India is the top buyer followed by China and Bangladesh.
“We’re out of peas,” he said.
It is the same story for lentils. Exports are 165 percent of the five-year average with the main buyers being India, Turkey and United Arab Emirates, in that order.
Weber sees 50,000 tonnes of carryout. There have only been three years lower than that.
The stocks-to-use ratio is forecast at 2.5 percent versus the 10-year average of 25.4 percent.
“Who’s not bullish now?” he said.
Weber sees 3.95 million acres of peas, up from 3.8 million last year. However, he thinks that might be low given new crop prices of $7 per bushel for peas and $5.50 for wheat and fertilizer prices that are not dropping.
He believes lentil plantings will contract slightly to 2.95 million acres, down from 3.11 million last year, which is still close to the record of 3.44 million acres set in 2010.
“There’s going to be a whack of lentil acres this year,” said Weber.
New crop lentil bids were 25 to 27 cents per pound at the Crop Production Show. Weber reminded growers they were thrilled with 20 cent bids this time last year.
“It’s all about laying off risk, and there’s some amazing prices out there right now,” he said.
Yellow pea bids were in the $7 per bu. range. Weber said he wouldn’t sell at that level, but he would if they rise to $7.50 to $8.
He is also bullish for peas and lentils because of the lingering dryness in the key pulse growing regions of India, Turkey and Australia.
Some weather forecasters believe El Nino has arrived, which would mean continued dry conditions for India, Turkey and Australia. Others are backing off, saying El Nino won’t arrive until the tail end of this year.
