(Commodity News Service Canada) — A smaller than anticipated harvest with questionable quality has helped to strengthen cash bids in Western Canada for canary seed.
“We’ve seen bids over the past month climb as high as the 25 cent per pound area,” according to Earl Schnellert, a grain merchandiser with Agri-Tel Grain at Beausejour, Man. “A lot of that has had to do with quality issues with this year’s harvest.”
The lateness of this year’s harvest, along with a significant frost in September, were behind some of the quality downgrades, Schnellert said.
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“Some producers were extremely disappointed with yields, especially when the stands had been looking excellent,” said Kevin Hursh, executive director with the Saskatchewan Canaryseed Development Commission, said.
Some producers had been anticipating at least a 30 bushel an acre yield, he said, but in turn the crop produced some significantly lower, if not alarmingly lower yields.
However, at 25 cents a pound, the upside in the cash market may be limited, the merchandiser said.
“End-users have been reluctant buyers at these price levels and are still hoping that values will soften further before becoming more aggressive in obtaining supples,” he said.
Schnellert acknowledged that end-users have had to buy to cover immediate requirements, but are doing so very reluctantly.
“At 25 cents, canaryseed may very well have hit a peak,” he said.
Canaryseed supplies in Western Canada were said to be adequate to meet any pickup in demand.
There was some canaryseed carryover from last year’s crop — and this year’s harvest, while smaller than anticipated, also will be enough to cover needs, Schnellert said.
Also, should Mexico again open up its borders to Canadian canaryseed, prices could temporarily bump up to the 30-cent limit, he said.
However, at those levels, the end-users will seek out alternative suppliers and even products, he said.
Producers have been willing sellers with canaryseed bids in the 25-cent area, and the merchandiser felt that they will continue to take advantage of these firm values.
“The problem with waiting for bids hitting 30 cents is that the Mexico situation does not look as if it will end anytime soon,” he said.
Hursh felt high values alone will not be enough to provide producers with incentive to seed the crop in the spring of 2011.
“Once a producer has a bad yield, the likelihood of that individual growing the crop next spring is greatly reduced,” Hursh said.
Prairie Ag Hotwire bids for canaryseed delivered to the elevator currently range from 21 to 23.5 cents per pound. In the middle of October bids were 17.5 to 23 cents and at the beginning of October they ranged from 17.5 to 24.5 cents.
