Dry pea exports tend to boom in the month of September, with the September 2018 volume no exception with 465,124 metric tons exported to all destinations. This is the lowest volume shipped in the month of September in six years, but just the same, was the largest volume shipped in 12 consecutive months.
The brown line on the attached chart highlights the growing share shipped to China. This percentage reached a recent low of 8.8% of total shipments in March of 2017, while reaching a recent high of 81% of total shipments in the month of June 2018. The recent September data shows this percentage increasing from the month of August to 76.6% of the higher September volume, meaning 356,475 mt was shipped to China during the month, the largest one-month volume shipped to this country.
Reports are suggesting that Canadian peas are viewed as an energy source as well as a protein source in feed rations in that country. Agricensus.com quotes a Chinese analyst who indicated "Pea protein is lower than soymeal, but it is higher in energy, although not as high as corn. I expect that two-thirds of the peas are to replace corn in feed and one-third is to replace soymeal."
This week, a USDA attach report lowered their forecast for China's soybean import demand from 94 million metric tons to 85 mmt, a move that could be confirmed when official data is released in Thursday's WASDE report. DTN's Ag Policy Editor Chris Clayton reported on Tuesday that ADM's CEO stated on an earnings call that China could continue to stretch out available supplies of soybeans, while seeking additional alternatives, waiting for available supplies from Brazil's soybean harvest. This should lead to further demand for peas on the front end of the crop year.
Most recent Statpub.com bids show yellow peas bid at $6.50/bushel ($7.70/bu.) delivered to Saskatchewan plants, up $.50/bu. or 8% from August lows while green peas are bid at $8.60/bu. ($8.10), up $1.10/bu. or 15% during the same period, with year-ago levels shown in brackets.
The current pace of movement, both seen in Statistics Canada's August/September data as well as the Canadian Grain Commission's cumulative data, as of week 13, points to exports well-ahead of the pace needed to reach the current AAFC target of 2.8 mmt. Producer returns due to the absence of significant Indian business could prove disappointing. AAFC's supply and demand tables show an average price of $300/mt returned to producers in 2016/17, $265/mt in 2017/18 and $230 to $260/mt forecast for 2018/19.
Cliff Jamieson can be reached at firstname.lastname@example.org
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