The canaryseed market is in a standoff as international customers stop buying and Canadian farmers are no longer selling.
The market started rallying in the summer and reached a record of 55 cents per pound by early fall. It has since cooled to around 50 cents.
“It has been a very wild market, to say the least,” said David Nobbs, special crops manager with Purely Canada Foods.
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Key customers were initially concerned that they wouldn’t get the product they needed.
“Mexico went hard,” he said. “Mexico bought 50 percent of their needs in two months. They bought a pile.”
Europe’s buying was measured by comparison and Argentina hasn’t been in the market at all this year.
But now there is a lull in demand as buyers have reined in their purchases and are turning to alternatives like canola and millet.
“The destination markets got comfortable that they had enough product,” said Nobbs.
Rayglen Commodities Inc. agrees that the demand urgency has quieted.
“We will have to wait and see if there will be another surge for more supplies in late winter or if buyers have bought up enough to cover until then, as per reports,” said the broker in a recent Rayglen Market Comments report.
Nobbs suspects buyers are content to hold out as long as they can.
“If they need to pay a record price for a few cars in July, so be it. That’s how they’re kind of acting,” he said.
Canadian supplies will be extremely tight. He estimates there were 30,000 tonnes of carry-in and another 120,000 tonnes of production.
That adds up to a total supply of 150,000 tonnes. He expects Canada will export 140,000 tonnes.
Agriculture Canada’s numbers are slightly different, with an estimated 5,000 tonnes of carryout, which is minuscule.
Processors and exporters will be desperate for acres and that is already showing up with new crop bids of 35 to 37 cents per pound picked up on the farm.
“(Those are) great new crop values to get the first 10 bushels per acre on the books while hedging against downside risk if you haven’t already,” stated Rayglen in its commentary.
Nobbs said those are the highest new crop values he has ever seen but he doesn’t know if they will be high enough. He recently booked new crop No. 3 durum at $12.50 to $13 per bushel, which is comparable to the canaryseed prices.
Farmers will have many attractive pricing options for competing crops this winter and spring.
“If we had offered 37-cent canaryseed three years ago, you’d have three times the acreage you’d need,” he said.
sean.pratt@producer.com
