Tight supplies of Canadian mustard are expected to keep spot prices quite high leading into harvest, according to Walter Dyck, mustard buyer with Wisconsin-based Olds Products.
“I think the carryover from the previous year is quite on the low end,” he said. “We’ve had fairly high spot prices the last few years, so there aren’t a lot of growers sitting on their product, because the prices have been really good.”
According to Agriculture and Agri-Food Canada’s outlook for principal field crops released Aug. 13, carry-over stocks have dropped significantly due to high spot prices.
The 2010-11 season saw 116,000 tonnes of mustard carried over, which compares to estimates of only 20,000 tonnes expected to be carried over from this season.
However, with more acres planted than last season, and yields looking like they will be higher, spot prices could drop after harvest, Dyck said.
“Once we get into harvest, there is a possibility that spot prices could come down,” he said. “It comes down to what an individual farmer feels he needs for his mustard. I see prices staying steady for now.”
Dyck said this season’s crops are some of the best he’s seen in the past decade, adding that yields could be 20 to 30 per cent higher than AAFC’s averages.
“Crops are looking really quite good,” he said. “They’re almost the best I’ve seen in average the past 10 years.”
Last season’s yields were hurt by extreme weather, but this season has been much kinder to mustard growers and their crops despite late seeding.
“A year ago, we got hit with above-average hail that probably affected our yields quite significantly,” Dyck said. “This year, we’ve had some hail incidents, but not at that level. Right now, the concerns are about maturity, as it is for all crops. They’re a little behind.”
AAFC expects roughly 120,000 tonnes of mustard seed will be exported this year, but Dyck said numbers could even be higher.
“I think Canadian mustard export demand is looking very steady,” he said. “Strong demand from traditional markets is going to be there again. That works out to approximately 125,000 to 130,000 tonnes of mustard that will leave Canada.”
Prairie Ag Hotwire’s price indicator for Tuesday has FOB farm Canadian yellow mustard topping out at 41 cents per pound.
— Brandon Logan writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.