Canary fundamentals tight

WINNIPEG, Manitoba -- The canary market has been more or less flat for three years, hanging around, or, more likely, just below the 25-cent level. In the scheme of things, these aren't bad prices, except maybe in relation to other crops.

We are part of The Trust Project.

WINNIPEG, Manitoba -- The canary market has been more or less flat for three years, hanging around, or, more likely, just below the 25-cent level. In the scheme of things, these aren't bad prices, except maybe in relation to other crops.

Fundamentals on canary have been tight and appear to be getting tighter, but that is an old story. The fact that total Canadian canary supplies this year appear to be less than normal exports is certainly bullish.

Canary markets are sluggish. Global demand is easing lower. In general, people that can afford pets are those that are taking an income hit.

Global exports of Canadian canary are dropping. From 2010 and 2011 to 2011 and 2012, global exports dropped from 178,000 metric tons to 126,000. Exports to Mexico fell from 58,000 to 22,000 metric tons.

Perhaps the fact that freight on board farm canary prices are still 23 or 24 cents per pound, or $12 per bushel, is actually a good news story. Should the Canadian and Mexican governments come to an agreement that normal trade can resume, it would certainly be a shot in the arm for canary prices. But the reality of lower global demand is a fact so don't expect a dramatic move.


Another negative stemming from these export troubles is that Canadian players in the canary export business have had a tough row to hoe.

Fewer players are willing to commit their resources to canary. The number of traders has shrunk.

Nonetheless, it's probable that an agreement with Mexico can be made and that the biggest single market for Canadian canary will be significantly easier to service. That probably won't happen until January, but it should be positive for prices.

One caveat for farmers looking for dramatic canary prices: They are unlikely. Really high crop prices occur when exporters are forced to originate for uncovered commitments they have made. It's unlikely many Canadian canary exporters have their necks stuck out. Prices are already moving in anticipation of easier servicing of the Mexican market. Last week, canary was 23 to 24 cents per pound. Today you can get 25 cents.

Mustard prices flat

Mustard prices have been about flat for the past year, but at relatively high levels. Yellow trades at 38 to 38.5 cents per pound, brown at 36 to 37 and Oriental at 27 to 28 cents.

Supply is the big story. Canada, a minor producer but a major exporter, has stopped producing excess mustard. The export market had groaned under burdensome domestic stocks for years, but Canadian plantings were cut back in 2011 and remain at lower-than-traditional levels.

Production did jump this year, but only because of the great growing conditions. SaskAg reports 2013 yields averaged 1,300 pounds per acre, substantially higher than the 10-year provincial average of 777 pounds.


Quality is fine.

Canadian exports are steady and should be around 120,000 metric tons this year, according to AgCanada.

Canola absorbing large stocks

Canola prices remain under pressure as the market continues to digest record Canadian production. Farmer deliveries in the system are coming in at a record pace, keeping the elevator system plugged and saturating domestic crusher demand. The January-March futures spread continues to trade near full carry, reflecting the large stocks in the pipeline.

Crush margins remain favorable but the domestic crushing industry is running at 80 percent capacity, down from 87 percent last year and the year-to-date crush pace is about 240,000 metric tons behind year-ago levels. Year-to-date exports to Sept. 30 were 0.706 million metric tons, compared with 1.119 million last year. Despite the record canola crop, demand is lagging.

U.S. soybean harvest is moving into the final stages and the soybean complex remains well supported because of strong meal demand. Soybean futures continue to trade at an inverse, which is telling farmers to sell soybeans now, rather than store over the winter. The tight soybean fundamentals continue to limit the downside on canola. Brazilian soybean planting is about 40 percent complete and conditions remain favorable.

Barley prices stabilize

Cash barley traded at $185 per metric ton delivered Southern Alberta the previous week, up $5 per metric tons from a week ago. Farmer selling has eased and domestic demand is increasing as more cattle move into feedlots. But the majority of feedlots have their November requirements covered and a good portion of December. Domestic demand over the next two months is limited.


Export values have remain stagnant because of aggressive competition from major exporters and limited freight on board capacity on the West Coast. Ukraine and Russian origin barley continues to trade at $245 per metric ton freight on board the Black Sea; French barley on the Atlantic ports has traded at a similar price to North African destinations.

Look for the barley market to trade in a narrow range in the next couple months. Limited domestic demand and strong export competition will keep barley prices in the elevator system relatively flat. Looking forward, we are anticipating a year-over-year decline in U.S. corn acreage by 6 million to 7 million acres next spring and Canadian barley acres could also be down by 5 to 8 percent.

Malting barley prices are also expected to remain flat in the next few months. Domestic malting companies have their requirements covered until late January.

Editor's note: Duvenaud is the publisher of the Wild Oats Grain Market Advisory. For a sample issue, either call 1-800-567-5671, e-mail or visit

Related Topics: CROPSMARKETS
What To Read Next
South Dakota Public Utilities Commission hits Banghart Properties LLC, with cease-and-desist on grain trades.
John and Sharon Leiferman's bale-grazing success at Dakota Winds Ranch Inc. is just the latest development in a life of frugality born in part by the 1980s farm crisis.
Maddock Ranch has a commercial herd made up of 100 cows and feeds about 400 to 500 calves annually.
Louis and Cyril Keller are the inventors of the Bobcat skid-steer loader and were selected as 2023 inductees into the National Inventors Hall of Fame.