The lentil market in Western Canada remains lacklustre at best, as demand is very slow and farmers have little incentive to sell at current prices.
"Bids and offers are just too far apart," said Bobby Leavins, of RayGlen Commodities in Saskatoon, on the current state of the lentil market.
Lentil exports were large in the first few months of the crop year, but demand has all but dried up with only small amounts of business now taking place.
Global economic uncertainty and the resulting credit issues facing many potential buyers accounted for some of the hesitation on the demand side, according to Leavins.
From farmers’ perspective, lentil prices have not risen to the same extent as the other grains and oilseeds, which means they have other crops to sell for cash flow needs and are content to hold out for higher lentil prices.
"It’s just stale," said Leavins, and "everyone is waiting to see what will happen with this market."
Bids for No. 2 large green lentils are currently topping out at 19 cents per pound, delivered to the elevator, according to the latest Prairie Ag Hotwire data. Red lentils top out at 18 cents per pound.
Aside from the possibility of production issues elsewhere in the world, Leavins said it may take a reduction in Canadian acres next spring to boost values. If the acreage looks tight, prices could see some support.
However, the likelihood of large carryout supplies, and the fact that end-users can’t afford to pay the prices Canadian farmers want to see, will make it tough to push values much higher.
– Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.