Low stocks-to-use ratio to keep pea bids well supported

Green peas. (PulseCanada.com)

Winnipeg | CNS Canada — Canadian pea exports have been running at a very solid pace during the 2014-15 crop year to date, but supplies are seen to be running out and the market will need to work to ration demand over the later portion of the marketing year.

Canadian peas have been leaving the country at an average rate of about 311,000 tonnes per month during the first half of the crop year, according to data presented by Heidi Dutton, general manager with ADM, at the Wild Oats Grainworld conference here Tuesday.

Canadian pea stocks at the end of December came in at 1.5 million tonnes, according to Statistics Canada data,nearly 700,000 tonnes below the five-year average for that time of year.

When factors such as seed, domestic usage and ending stocks of only 100,000 tonnes are factored in, there are only 150,000 tonnes per month of exportable peas available, said Dutton, noting monthly exports have not dipped below that point once during the past five years.

“We’ll be virtually cleaned up,” she said.

The tight supply situation should see Canadian pea acres steady to higher on the year at 3.8 million to 4.1 million acres in 2015, although Dutton noted root rot issues in some areas will see some acres lost to fababeans.

Canadian farmers seeded 3.795 million acres of peas in 2014, according to Statistics Canada data.

She estimated overall pea production would increase by about 400,000 tonnes, to come in at 3.8 million tonnes and predicted a carryout for 2015-16 of 305,000 tonnes, which would mark the second consecutive year of tight stocks-to-use.

As a result, Dutton expected yellow pea prices would remain strong above the 10-year average, of $6.40 per bushel, with current bids of about $7.50 per bushel.

Shortages in India and increasing demand from China were expected to remain supportive for yellow peas, but she said the demand fundamentals were flat as far as green peas were concerned.

Dutton expected yellow peas would be the driver in the pea market, with the green pea premium over yellows likely eroding further over the year.

The situation for lentils is very similar, with good export demand and tight supply projections expected to remain supportive heading into the 2015-16 crop year, according to a presentation at the conference from Elyce Simpson Fraser of Simpson Seeds.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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