Analyst expects 20 percent more acres in 2015
Growers need to focus on only one factor when assessing the canaryseed market, says FarmLink Marketing Solutions.
“The key question we think in the canaryseed market today is how much are supplies understated and is there enough supplies to service demand going forward this year,” said FarmLink analyst Alyssa Mistelbacher.
Statistics Canada estimates supplies at 125,000 tonnes and is forecasting a paltry 5,000 tonnes of carryout.
Prices would be a lot higher than 25 cents per pound if that were the case, said Mistelbacher.
“We believe the market is about 60,000 to 80,000 tonnes underestimated.”
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She said Statistics Canada has been low-balling supply for years.
“We’ve actually exported this past year more than supplies on paper, and that’s likely the same thing that will happen in 2014-15,” Mistelbacher told growers recently at Crop Production Week in Saskatoon.
Regardless, it is clear that supplies and ending stocks will still be historically tight, which should lead to a firming of prices by spring and summer. They could climb to 29 cents or even higher if FarmLink is wrong about supplies.
“If there is less canaryseed than presumed, there is potential for a big spike in values as hoped for in many years,” she said.
It’s why FarmLink is forecasting a 20 percent increase in plantings in 2015 to 325,000 acres.
That may seem like a big jump, but it pales in comparison to the 859,313 acres seeded in 2004.
Mistelbacher said there should be enough production in 2015-16 to meet demand, but it won’t be enough to overwhelm the market. She is forecasting another year of tight ending stocks.
“Really, the market is one production issue away from being pretty significantly undersupplied.”
Exports have been brisk so far this year, with 70,000 tonnes shipped through the end of November, up 10,000 tonnes from the previous year.
It bodes well for prices, as does the weakening Canadian dollar, which has added about one cent to prices since fall.
sean.pratt@producer.com
