Pea trade steady

WINNIPEG, Manitoba -- Canadian pea production this year was down 13 percent from a year ago. The carry-in was not burdensome. Exports are moving well, ahead of last year's pace.

WINNIPEG, Manitoba -- Canadian pea production this year was down 13 percent from a year ago. The carry-in was not burdensome. Exports are moving well, ahead of last year's pace.

The quality of the Canadian crop was hurt by the late summer and fall rains. About 30 percent of the crop is No. 3 or sample. That said, a large portion of the pea crop, especially greens, was harvested before the rains and quality is not a huge issue.

There was considerable competition in the export market through fall from both Russia and Ukraine but this appears to be easing.

Russian and Ukrainian producers have been motivated sellers off the combine, but combining is long over. Motivated sellers have long since sold out. It's getting hard to source volumes from that part of the world. That leaves Canada and, to a lesser extent, U.S., France and Australia as the only stores in town with peas for sale. Now we're settling into routine trade.

China has become the dominant buyer of Canadian peas, and that's a huge market. China imported almost no peas 10 years ago, but it has been bringing in more every year. It's up to about 500,000 metric tons of Canadian imports a year. The entire Canadian pea crop is a drop in the bucket for Chinese food ingredient importers.


India is the other big pea importer. It's coming off a drought-damaged kariff (summer) crop, so it's total pulse imports should be at least steady.

Yellow production was 2.7 million metric tons. Prices fell to $6 per bushel at harvest and have been gradually strengthening since. Now $6.50 freight on board and $7 per bushel delivered is available in several locations and some buyers are probably picking up yellows at $7 freight on board. There isn't likely to be much pressure on this market now that Russia and Ukraine are backing off their exports.

Expect yellows to continue to gradually strengthen through the winter.

This is a calm market with no futures, so don't look for any fireworks, but $8 per bushel for yellows is possible later in winter.

Green production was 820,000 metric tons, which is about normal.

Greens are still at a healthy premium over yellows, but are no longer a scarce item. Quality is a much bigger concern with greens but most were harvested before that month of rain in late August and September. Bleached green peas have good markets in India.

Greens dropped to $8 per bushel at harvest, but they have been strengthening.

You can probably find $9 freight on board today. There are reports of trades at $10.


Canola rallies

Western Canadian canola prices rallied because of stronger meal and vegetable oil prices. Farmer selling has slowed now that harvest is finished and commercial stocks are extremely tight. The January March canola futures spread is now trading at even money (relatively the same price), reflecting the stronger basis levels in the country system. Domestic crush margins have improved, while the export pace continues to run sharply above year-ago levels. The fundamental structure is tightening and the canola market needs to ration demand moving forward. But at this stage, there is no signal that canola demand is backing away at the higher levels.

Soybeans also staged a spectacular post -harvest rally largely because of the tight domestic soymeal situation. U.S. soybean export sales are running ahead of last year. While many analysts are pointing to the burdensome fundamental situation for soybeans, realize U.S. farmers have sold approximately 45 percent of the 2014 crop. The soybean market is not getting more bearish, but rather neutral to positive as farmer selling eases. and demand stays firm. On the flip side, timely rains have occurred in Brazil and Argentine seeding conditions are also favorable. Crude oil prices remain under pressure also tempering strength in the oilseed complex.

World wheat developments

World wheat values have strengthened now that Northern Hemisphere harvests have wrapped up.

The Australian wheat crop is estimated at 22 million metric tons, down from last year's 25 million metric tons because of dryer conditions. Harvest is in the beginning stages and quality is good. The Argentinean wheat crop is estimated at 11.5 million metric tons, compared with 10.5 million last year.

Limited export quotas and currency issues continue to plague exports from Argentina.

Russian winter wheat seeding is virtually complete, but adverse dry conditions have lowered crop prospects. The crop is in poor shape going into dormancy. Ukrainian winter wheat seedings are expected to be marginally higher, but conditions have been variable as the wheat heads into dormancy. European winter wheat area will be similar to last year and seeding is well underway with favorable moisture conditions.


Chinese winter wheat seeding is 80 percent complete with above-normal precipitation.

China will leave the farm price at $385 per metric ton for 2015 and apparently has bought 25 million metric tons so far this year, three times the amount from last year. U.S. winter wheat is 90 percent planted and conditions are rated 59 percent good to excellent.

Editor's note: Duvenaud is the publisher of the Wild Oats Grain Market Advisory. For a sample issue, call 1-800-567-5671 in Western Canada and North Dakota, 204-942-1459 for all others, or e-mail or visit

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