Manitoba Agriculture, Food and Rural Initiatives

Commentary – Grains and Oilseeds Markets

Date: November 6, 2009.

Markets for field peas have softened as harvest progressed around the world.  Delayed field pea production in Canadian has allowed exporters from Central Europe to sell more yellow peas to India at competitive prices, thereby increasing its share of the Indian market.  US marketings of field peas at lower prices placed additional pressure on Canadian prices compounded with reports of poor quality field peas in Canada where samples show damage from bleaching, immature seeds and uneven germination.  Indicators from Australia point to good field pea crop prospects due mainly to early winter rainfall.  Not surprising, feed pea prices followed the downward trend in edible pea prices and prices are expected to remain under pressure from lack of new demand and quality concerns.

Concerns that harvest-related pressures may keep pushing lentil prices lower, supported off-the-combine sales and encouraged producers to fill fall delivery contracts.  Limited shipping capacity also put pressure on prices as processors tried to balance in-coming supply with available export opportunities.

Mustard markets started to ease over harvest yet domestic prices remained fairly steady as a result of strong domestic demand.  Reports from Eastern Europe suggest that mustard crops are in good shape.  If so, high estimated production from increased acreage would allow these countries to meet European needs, displacing demand for Canadian product over the course of the year.  As a result, Canadian prices may have to decline to meet European bids if trade levels hover around 10 cents per pound below Canadian prices.

Oil-type sunflower markets are expected to follow soybean and canola markets, and may lose some value as commodity markets weaken.  The slower crushing pace and large stocks of oilseeds also helped to pressure prices down.  Lower projected world production should help sunflower oil to return to a premium, post-harvest especially as carryover stocks are exhausted.  Confectionary sunflowers continued to trade at a premium over oil-type sunflower with limited old crop stocks and strong consumer demand.  Canada has become a key player in the confectionary market as US confectionary seed production has slumped and Argentine production has been drastically reduced by drought. As a result, domestic prices are expected to remain strong until the end of 2009 and into the new crop year.