As seen on the attached chart, the No. 2 yellow pea bid delivered into southeast Saskatchewan locations has moved from close to $230/metric ton in early March to a high of $278.32/mt as of May 25, according to pdqinfo.ca price data. While not shown, the other eight regions of the Prairies monitored also reached highs on the same day, ranging from $259.70/mt in eastern Manitoba to $296/mt in northern Alberta.
Prices have been on the defensive since reaching the recent high, with the June 2 price data showing a one-day price drop ranging from $3/mt in southern Alberta to $10.71/mt in eastern Manitoba. For four of the nine prairie regions monitored, this was the largest or close to the largest one-day drop in prices seen this crop year. June 3 data shows a further drop of $0.86/mt to $2.18/mt seen across the nine regions, with bids ranging from $248.55/mt to $283.93/bushel, with prices the highest in the western regions.
This is an unusual time of year for price weakness, with producers focused on both spring seeding and in some cases, harvesting 2019 crop. Week 42 CGC statistics shows producers delivering only 23,800 mt of dry peas into the licensed handling system during the week, down for the second straight week. Canadian dollar, strength could be a factor. In just three sessions this week, the spot Canadian dollar has gained 156 basis points or over 1.5 cents against the U.S. dollar. This brings the CAD/USD exchange to its highest level reached in over 12 weeks.
Another factor to watch is issues in trade with China. It is widely accepted that Canada may face the burden of further economic retaliation from China following the British Columbia Supreme Court ruling that the Huawei executive held by Canada will face a hearing for extradition to the U.S. As well, Canada has joined the U.S. and Australia in a press relief to condemn China for its actions in Hong Kong.
This comes at a time when major U.S. news sources are reporting that China is cancelling shipments of a number of U.S. agricultural commodities. At the same time, the USDA is reporting fresh sales being made, although the volumes continue to disappoint market watchers when volumes are compared to volumes needed to reach the Phase-One trade deal targets.
On June 3, the Canadian Grain Commission released the April Exports of Canadian Grain and Wheat Flour. The export of peas in April totaled 259,800 mt, the highest volume shipped since September, with 54% of this volume or 140,400 mt shipped to China.
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Cliff Jamieson can be reached at email@example.com
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