Canaryseed rangebound, but more upside likely

(Resource News International) — Canaryseed values in Western Canada have traded within a rather narrow range since the fall, but could eventually find some support from ideas that supplies will be tighter in 2009-10.

Farmers in Saskatchewan, where the bulk of Canada’s canaryseed is grown, seeded 300,000 acres this spring, which compares with 390,000 acres in 2008, according to the latest Statistics Canada estimates. Production is forecast at 120,000 tonnes by Agriculture and Agri-Food Canada, which compares with 196,000 the previous year.

Bobby Leavins, operations manager with Rayglen Commodities in Saskatoon, said the market has been quiet since harvest time, with prices generally hovering between 18 and 20 cents per pound.

Going forward, he thought there was a greater potential for an upward move in canaryseed, then a downward move, given the reduction in acres and the fact that conditions have been stressful for many of those fields that were planted.

Kevin Hursh, executive director of the Canaryseed Development Commission of Saskatchewan, added that the west-central region of Saskatchewan is one of the main canaryseed growing areas, and it has been affected by drought.

With the likelihood of a production shortfall, Hursh said, he was surprised that prices have not moved higher already.

Lower demand may behind the lack of price movement to date, Leavins said. “It doesn’t matter if our crop isn’t big, if no one is willing to buy it,” said the merchant.

While demand is typically fairly steady for canary seed, he said the global economic downturn may have caused some end-users to back away from the market for the time being.

Hursh noted canary seed is typically a speculative crop, and farmers will hold onto their supplies if they feel prices should move higher. He thought prices could rise at harvest time when the production shortfall becomes more evident.

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