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July Market Report

Posted on July 11, 2013 · Posted in News

With Saskatchewan’s booming economy, a common saying here is that in Saskatchewan there are two seasons: Winter and Construction. At Agrocorp Processing, we are currently well into and enjoying our construction season. As our facility nears completion, we are building with excitement and anticipation of what the new crop will bring. Our grand opening is on Friday, August 16, and I would like to extend an invitation to come and join us at the plant. Contact our Moose Jaw office if you will be in the area and we will throw a hamburger on the grill for you!

Conditions have been very favourable for crop advancement for all seeded crops. Generally speaking, areas west of Moose Jaw are looking ideal, while areas east of Moose Jaw are struggling with excess moisture and local flooding and damage to low laying areas. At this stage of the growing season, when crops are looking yellow it means that they are struggling and bordering on being drowned out. I have often relayed my opinion that the conditions during the first half of the growing season largely affect the quantity produced, with weather conditions at the end of the growing season affecting the quality produced. We are now entering into the stage of crop development where the plants are setting seed, filling, and maturing. Any significant weather incidents from here out will result in downgrading or other quality related issues. We have had enough moisture to ensure that I expect yields to be solidly average to above average. I would caution anyone to declare the crop a “boomer” to remember that the growing season is like any sports game—just because you are ahead at halftime doesn’t mean you will win the game. Any Toronto Maple Leafs fans will be able to relate.

Green Lentils will arguably be the most affected crop by the excess moisture in the southeast area of the province. Acres have already been reduced by 25%, and in many areas south east of Moose Jaw, there may be additional 20-35% lost acres due to flooded/drowned crops in some localized areas. Green lentils enjoyed a brief rally in the spring, fuelled largely by anticipatory buying from southern India. Seeded acreage reports would suggest that there will be a tighter supply of new crop green lentils, and I would expect prices to adjust and reflect this once the new crop quality and quantity is determined.

Red Lentils have been very active through the spring. The rally that saw prices rise by 5-8 cents per pound in the late winter have been sustained, and we are seeing good levels of demand for red lentils at this price well into new crop. Growers have participated in liquidating old crop stocks, while also capturing excellent values for their new crop red lentils. Acres have responded according to these strong prices and red lentil production will be higher than last year. While it does not look that the market is poised to rocket through the roof, there has been a very positive, stable marketplace for red lentils—with the usual ebbs and flows of trading. Most areas of red lentil production look poised to produce above average yields. Processors and marketers will have their hands full with executing business already on the books for the “off the combine” period.

Chickpeas are completely quiet. Astoundingly cheap supplies of low-quality chickpeas from other originations (mainly Indian and Argentinian) have ground Canadian exports to a halt. Even though the Canada #2 quality is among the world’s best, many buyers are opting for chickpeas with poorer colour and higher damage as long as they get it cheap, cheap, cheap. Interestingly enough, offers for higher quality, large calibre chickpeas still carry a significant premium—it is just that nobody seems to want to purchase high quality at the moment. We were a little surprised to see that seeded acres in Canada were not sharply reduced, as we all expected chickpeas to be removed from rotations due to their need for a long growing season combined with the very late start. Because chickpeas in Canada rely on a clear harvest, it is impossible to predict what the quality will be until the sample arrives on my desk. September tells the tale of chickpeas in Saskatchewan, and we are at the mercy of nature during that month. There are a few new varieties being multiplied right now that are very exciting, as it looks that we will have larger amounts of 9 and 10mm being produced in the upcoming years.

Green Peas have seen strong plantings, although seed was not readily available, there will certainly be higher production than last season especially when it would appear that the US has also increased green pea acres. I think it would be wise for growers to lock in a portion of their production at excellent new crop prices being currently offered.

Yellow Peas have remained steady for nearly a calendar year. Plantings were strong, crops look good, and things just keep moving forward accordingly.

For any inquiries, please contact the Moose Jaw office at 1(306)693-8887, or email Cori at cori@agrocorp.ca and she will let you know our most current bids.

I would like to take a moment and thank all of our producers who have moved product through our site during this construction phase. We will continue to work hard to bring you competitive prices, good delivery terms, straightforward, and transparent contracts. I look forward to earning your business during the new crop! Go Riders!

Colin Young
Manager

Agrocorp Processing Ltd.
Box 1118
Moose Jaw, SK
S6H 4P8