Demand has been steady due in part to a smaller-than-average crop in Argentina, which is the only other major exporter
Canaryseed growers can expect firm prices for the remainder of 2020-21 and likely continuing into next year as well, according to a market analyst.
“I’ve been waiting for the canaryseed market to get a little bit more bullish for a while now and it looks like this year is the one where that’s actually happening,” said Chuck Penner, analyst with LeftField Commodity Research.
He told delegates attending the Canary Seed Development Commission’s annual general meeting that Statistics Canada’s December estimate was 161,000 tonnes of production in 2020-21.
The past couple of years the final production number ended up being way higher than the December estimate but he doesn’t think that will be the case this year because prices are in line with that level of production.
About one-third of the production was hairless varieties.
Exports started slow this marketing campaign but there was a seasonal bump in November as buyers filled a hold in a vessel heading to the European Union from Thunder Bay.
Demand has been steady due in part to a smaller-than-average crop in Argentina, which is the only other major exporter.
Prices in the fall were the highest they have been in years due to seasonal patterns and tight supplies.
But Penner noted that canaryseed markets tend to meet resistance at around the 30 cents per pound level.
“Once you get up to those levels the odds of a meaningful increase go down significantly,” he said.
There is typically a bit of a price rally early in the new calendar year as buyers attempt to build coverage for another vessel heading out of Thunder Bay to the EU in April or May.
That rally didn’t happen last year. Whether it happens this year will depend on how much coverage is already in place for that shipment.
Prices should continue sideways for a while in 2021 with a possible bump up early in the spring and then they will subside heading into harvest.
But there shouldn’t be a dramatic decline this year due to the tight supplies and strong prices of other birdseed ingredients like millet.
New crop prices will depend a lot on how many acres go in the ground.
Penner is forecasting 290,000 acres based on an estimated new crop contract price of about 25 cents per lb. That would be a six percent increase in plantings, which he thinks could turn out to be a little conservative.
Given average yields and a small carry-in of 13,000 tonnes, that would result in 180,000 tonnes of total supply, down from 189,000 tonnes in 2020-21.
“That’s quite tight and it will limit the kind of export program we can have next year as well too and cause some of that demand rationing,” he said.
Ending stocks are estimated at a paltry 10,000 tonnes in 2021-22, resulting in the continuation of the firm price trend for the year.
But all bets are off if growers decide to increase acres by 20 percent or something near that.