Lentils bring strong prices
WINNIPEG, Manitoba — Lentils are the crop to have in your bins these days. With factors on the other side of the world, demand is strong and prices are great.
Reds started the crop year hot, eased off, and are again coming back. It looks as if Indian buyers were here late last summer, got their initial orders filled and only came back to our market in mid-September. You can probably pick up 40 cents per pound for reds.
The second surge in green lentils also came along in mid-September. Most processors had pre-bought quantities during the winter, spring and summer and, once off-the-combine deliveries eased off, were seeing how much more they could get a lock on.
Greens are still the more interesting crop. With most of the world’s export green lentils grown in Saskatchewan, it is apparent we are going to run out of greens before next summer. The entire Canadian lentil crop was just more than 2 million metric tons and only 30 percent, 600,000 metric tons, were greens. That’s less than normal export demand.
No. 1 Lairds, not easy to find, trade at 42 to 45 cents per pound. No. 2s, which are easy to find, trade at 38 to 42 cents per pound, and No. 2 Estons trade at 33 to 35 cents per pound. These are the lentils that will run out.
Export demand for Lairds has taken off this year, which is a change from last year when they were hard to move. Now, it seems the world is hungry for greens. If red lentils are the quintessential edible protein, greens are a rich persons’ food. Prices don’t matter all that much when it’s just another line at the grocery store checkout.
Laird lentil prices are not going to go to the moon. Remember, it’s still just food and replaceable by any number of beans and peas. Trade will continue all year, even after it looks as if we’re out. There are just too many farmers out there with lentils in the bin. The number of processors handling greens will gradually drop. No commercial is going to commit to a sale of Lairds or Estons that they don’t own or have a handle on. That means there will be no panic buying like that currently seen with Oriental mustard.
Western Canadian canola values continue to trade in a narrow range as solid demand is overshadowed by aggressive farmer selling. The weekly domestic crush reached 185,000 metric tons recently, bringing the crop year-to-date crush to 1.37 million metric tons, up from 1.34 million metric tons last year. Crop year-to-date exports for the week ending Oct. 4 were 1.66 million metric tons, compared with 1.5 million metric tons during 2014 to ’15. We see farmers delivering a larger portion of the crop in the front end, and with the overall year-over-year decline in production, the market has potential to strengthen after harvest. Farmer deliveries were 542,000 metric tons, bringing total deliveries to 3.3 million metric tons, up from 3.1 million metric tons last year.
U.S. soybean production is expected to finish at 3.88 billion bushels, down marginally from the 2014 crop of 3.93 million bushels. Exports are expected to be down from year-ago levels, as the South American crop takes market share from the U.S. Department of Agriculture is projecting
the 2015 to ’16 carryout to come in at 425 million bushels, nearly double from last year. The soybean complex will have a tendency to trend lower in the latter half of the crop year as the market functions to discourage production for 2016. This could temper the upside in canola, longer term.
Lethbridge, Alberta, feedlots were buying feed barley in the range of $212 per metric ton to $216 per metric ton delivered recently; Calgary operations were making purchases from $210 to $213 per metric ton. Cattle-on-feed inventories increase sharply through October and November resulting in stronger domestic demand. At the same time, Canadian exports of feeder cattle and calves are now running 10 percent behind year-ago levels. During the winter, we expect Alberta and Saskatchewan feedlot numbers to exceed last year’s inventory levels by 8 to 10 percent.
Feed barley exports are rather sluggish so far this crop year. But, Canadian barley exports are projected to reach 1.3 million metric tons, similar to last year. The bulk of the exports will be malt barley as Canadian export offers are uncompetitive on the world market. Ukraine and Russian feed barley is offered at $185 per metric ton freight-on-board in the Black Sea while French barley is offered at $190 per metric ton. Canadian feed barley is offered at $205 per metric ton freight on board the West Coast. Given the stronger domestic demand and tighter available supplies, the market will need to ration supplies away from offshore channels. We continue to project higher prices for feed barley later in the crop year.
Editor's note: Duvenaud publishes the Wild Oats Grain Market Advisory. For a free copy, call 800-567-5671 in Western Canada and North Dakota. All others call 204-942-1459.