Summer is generally a time when the pulse markets go through a bit of a lull, but it’s always good to know what might happen in the markets come harvest.
Chuck Penner of LeftField Commodity Research says that both farmers and buyers are sitting on the sidelines at this time of year, especially with widespread drought across much of the Prairies.
Penner says that right now, the elephant in the room is trying to figure out what kinds of yields are out there, as well as what the quality will be like. “There’s a lot of guessing games going on there about the yields and everyone should at least be ratcheting down their yield estimates,” he says.
For yellow peas, China normally buys about 80 per cent of Canada’s pea crop, and they’ve already purchased for most of their needs says Penner. Some estimates say that China has bought half the amount of peas as they did last year, which hinges on the country’s hog market.
When it comes to lentils, India has a regulatory hold, causing a bit of a political dance. Penner says most of the volume that any stakeholder in the value chain can hold is 200 tonnes, and trying to ship a 60,000 tonne vessel of lentils to India right now just can’t be done. Penner adds that if lentil prices get too high in India, they’ll have to open the door to other pulse crop imports.
The largest importers of chickpeas are Pakistan and the U.S. Currently, south of the border is facing an immense amount of drought in the pulse growing areas of Montana and the Pacific Northwest. Chickpea prices have been rising, so with the smaller-than-expected crop, it will be a friendly market.
Faba bean acres, not typically seen in areas prone to drought, are second largest on record this year with a prospected 126,000 acres in the ground, and Penner says that Australia’s crop will dictate what will happen in the market.
Producers are bullish across the board with pulses, and Penner recommends to be patient because the yield numbers are still unknown and demand is going to show up more into the new year.
From trading abroad, to domestically, to all stakeholders along the value chain, Penner provides insight into the pulse market in this Pulse School episode: