Slow pulse exports may boost carryover

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Published: January 24, 2014

There are dozens of vessels in Vancouver’s English Bay and elsewhere on the West Coast waiting to pick up grain. The railways are unable to keep up with a huge sales program sparked by a record large crop.  |  Photo Courtesy of Port Metro Vancouver

Slow sales | Analyst says growers may be wise to jump on new crop bids

Pulse exports are lagging well behind where they need to be, says an industry analyst.

Bulk pea shipments in the first four months of 2013-14 were 739,413 tonnes. Pea exports will fall 500,000 tonnes short of Agriculture Canada’s expectations if that pace is maintained.

“That’s not happy news,” Larry Weber, analyst with Weber Commodities Inc., told growers attending CropSphere 2014.

“We can’t carry forward half a million tonnes of peas next year and expect the price to stay at $6.”

He is more concerned about lentils.

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Bulk exports through the end of November were 170,674 tonnes, a pace that would result in exports being 1.1 million tonnes below Agriculture Canada’s target. Weber said another 100,000 tonnes have probably been shipped by container.

“We’re about one million tonnes behind where we should be at the end of the year, and that’s huge,” he said.

India’s winter crop will be harvested in about three months, which puts additional importance on moving lentils quickly.

However, the prospects of shipments catching up to export targets is not good, considering the backlog of competing crops waiting to be moved through the West Coast and grower unease about selling.

“The bad thing about this transportation debacle that we’re in is it’s going to get tougher to make spot sales because everybody is scared to do it because they don’t know if they’re going to get transportation,” he said in an interview following his presentation.

The slow pace of exports is why Weber believes growers should be jumping on new crop bids that surfaced at the Crop Production Show of $6 per bu. for yellow peas, $10 for green peas, 19 cents a pound for red lentils and 18 cents for greens.

“At $6, you can make a profit with peas. Think profit, not price. Everything has changed this year,” said Weber.

He expected old crop yellow pea prices of $5.50 to $6.50 per bu. for the remainder of the crop year, greens in the range of $10 to $12, large green lentil prices of 20 to 23 cents per lb. and red lentils in the 18 to 21 cent range.

Weber is forecasting significant acreage increases for peas and lentils this year despite his prediction for slumping prices because they are still more attractive than spring wheat values.

His original thought was that pea plantings would increase to 3.55 million acres from 3.29 million acres last year.

“I’m probably low. You can book $6 yellow peas today off the combine for fall 2014. You can only book $4.50 red spring wheat number one 13.5 (percent) today,” said Weber.

Any time the spread between those two commodities reaches $1.50 per bu., there is usually a big pulse acreage response. Weber wouldn’t be surprised to see four million acres of peas next year.

He expects 2.8 to three million acres of lentils in 2014, up from 2.4 million acres last year. New crop bids of 19 cents per lb. for lentils is far more attractive than $4.50 per bu. spring wheat bids.

“That’s also a no-brainer,” said Weber.

He believes 19 cent bids for new crop red lentils will be fleeting.

“If you get an opportunity to lock some in there, take it because it’s not going to be there long.”

About the author

Sean Pratt

Sean Pratt

Reporter/Analyst

Sean Pratt has been working at The Western Producer since 1993 after graduating from the University of Regina’s School of Journalism. Sean also has a Bachelor of Commerce degree from the University of Saskatchewan and worked in a bank for a few years before switching careers. Sean primarily writes markets and policy stories about the grain industry and has attended more than 100 conferences over the past three decades. He has received awards from the Canadian Farm Writers Federation, North American Agricultural Journalists and the American Agricultural Editors Association.

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