The latest crop reports show the dry pea harvest nearing completion, with 97% of the Saskatchewan acres off as of Oct 28 and 96.4% of the Alberta acres off as of Oct. 29. In some cases, some acres may be delayed until spring, with the Peace Region of Alberta estimating the dry pea harvest at 87.7% complete, while at least one county in the Peace has declared a state of Agriculture Disaster.
When provincial yield estimates are compared to official Statistics Canada estimates released early this fall, we find that the Saskatchewan government has most recently estimated the average pea yield at 39 bushels per acre, which compares to the official Statistics Canada estimate of 38.1 bpa while could be viewed as more current than Statistics Canada's data.
At the same time, Alberta's provincial dryland yield estimate is 38 bpa, as compared to Statistics Canada's 43 bpa estimate. Over the past three years, Statistics Canada's official estimate has averaged just 1.3 bpa higher than the Alberta government's final estimate. Using provincial estimates along with Statistics Canada's harvested acre estimates, which remain in question, the prairie production potential could fall by close to 260,000 mt from the current 4.677 million metric ton estimate utilized by AAFC based on Statistics Canada data.
A look at the demand side shows dry pea exports up 57% year-over-year as of week 12 or the week ending Oct. 27 at 848,500 mt, but still 12.2% below the five-year average for this week. Looking at the September trade data released on Tuesday, 86% of September exports were destined to China.
Over the past five years, an average of 30.5% of total crop year exports were reported as of the CGC's week 12 licensed export data, a pace that would project total crop year exports at roughly 2.8 mmt, which compares to the current AAFC forecast of 3.4 mmt. At the same time, exports in 2018-19 were off to a slower start, with only 16.6% of total crop year exports reported as of week 12 data, a pace that would project forward to exports of 5.1 mmt, an impossible volume that would likely exceed crop year supplies. Exports are off to a solid start and supplies could be a limiting factor.
Of interest in the September trade data is the absence of Bangladesh demand. Canada shipped a record volume to this country in 2018-19 and it is expected to remain one to the top three destinations in 2019-20. Looking back through 2018/19 Statistics Canada data, less than 10% of crop year exports were shipped to this destination in the first quarter of the year, while close to 75% of shipments were in the final six months of the crop year.
The attached chart shows the trend in green pea and yellow pea prices delivered to Saskatchewan plants, as reported by Saskatchewan Agriculture and Statpub.com. A recent bump in the bid for yellows to $6.35/bu. has faced a setback in recent days with a drop back to $6.18/bu., which is 5% lower than reported this time last year. Statpub.com quotes a forward February/March/April bid ranging from $6.20 to $6.50/bu., with limited carry seen in this market.
Green peas are showing promise of recovery, with recent bids jumping from $8.13/bu. to $8.63/bu. and then again to $9.63/bu. This reflects a price that is $1/bu. or 12% higher than reported this time last year. Statpub.com reports Feb/Mar/Apr bids ranging from $10 to $10.50/bu. for the highest grades, while sellers may be patient after the $13-$14 bids seen in the spring of 2019.
The current move shows a 41% retracement of the move from the April high to September low, with potential resistance at the 50% retracement of $10.16/bu.
Uncertainty surrounding this year's harvested acres, yield and quality will be supportive features for this market.
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Cliff Jamieson can be reached at email@example.com
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