What Will Happen With Canadian Pulse Supplies?

By Chuck Penner LeftField Commodity Research

There will always be some argument about the exact size of the 2013 Canadian crop, but it’s fair to say people will reminisce about 2013 as a year to remember. Along with a huge crop though, there’s always the question about what to do with it now that it’s in the bin. In this article, we’ll look at some ideas for marketing the memorable 2013 pea and lentil crops.

It’s quite certain the Canadian pea crop set a new record in 2013 even though acres were lower than last year. Statistics Canada hasn’t released its final estimate yet, but provincial crop reports suggest the average yield could be more than 45 bushels an acre (bu/ac), nearly 12 bushels higher than last year. If so, it puts the crop close to 4 million tonnes. The one saving grace for peas is that supplies carried over from last year were very low.

When we look at what will happen with peas, we need to look at yellow and green peas separately. There’s still lots of disagreement about how much of the 4-milliontonne crop is green and how much is yellow but the bottom line is there’s more of both than last year.

There are two important words to describe demand for yellow peas – China and India. Chinese demand has been growing for the last several years and is expected to expand a little more in 2013/14. It’s the Indian demand that is a little more concerning, since it can fluctuate a lot from year to year.

There’s a general feeling that this winter, India will be growing more chana (desi chickpeas, which yellow peas replace) and possibly yellow peas. That’s not a sure thing yet but it’s also not something that can be ignored. That Indian crop will be harvested starting in February and March and if it’s considerably larger, will cause demand for yellow peas to weaken later in 2013/14. That could cause yellow pea supplies to back up in Western Canada and add some risk for the yellow pea price outlook.

The more positive part of yellow pea demand is coming from the domestic feed market. Essentially, protein supplies are still expensive enough to keep feed pea prices well supported compared to feed grains like barley and wheat. Those aggressive bids from the feed side are basically providing a floor for yellow edible pea prices, limiting the downside risk.

Source : saskpulse