Canada Markets

Dry Pea Prices Remain Firm as Harvest Progresses

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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It will be some time before Statistics Canada updates yield estimates in its September Estimates of Production report which will be released in early October. With current estimates suggesting the potential for a below-average dry pea crop on the Prairies, rationing of demand may become a necessity through the entire 2015/16 crop year. As a result, prices have remained firm and have failed to show signs of harvest-pressure.

Alberta's most recent crop report pegged the province's dry pea yield at 31.8 bushels per acre as of August 11, with 23.6% of the crop harvested. This is down 26% from the five-year estimate of 42.8 bpa. As of Aug. 10, 19% of the field peas in Saskatchewan had been harvested as per provincial government estimates, with estimates surfacing suggesting that yields could also be 20 to 30% below the five-year average of 34.1 bpa.

Using Alberta Agriculture's recent provincial yield estimate, along with a 25% reduction from Saskatchewan's average yield along and Manitoba's average yield on the balance of the acres estimated by Statistics Canada, total production would reach 2.7 million metric tons and would be a four-year low.

Production at this level would suggest total 2015 supplies at 2.820 mmt when plugged into AAFC's supply and demand tables, a volume which is 430,000 mt below the current total supply estimate, which already suggests a tight 2015/16 carryout of 50,000 mt, or just 2% of demand.

Week 1 CGC data shows producers delivering 89,600 metric tons of product in the week ending Aug. 9, up from 47,000 mt the week prior and well above the 31,600 mt delivered in week 1 of the 2014/15 crop year. As well, visible commercial stocks in licensed facilities are pegged at 199,900 mt, up 94% from the previous year and well above the three-year average for week 1 at 107,300 mt. Early signals suggest a continuation of last crop year's strong demand and movement.

Given the circumstances, prices are not showing signs of harvest pressure. While yellow peas have slipped just slightly in price ($.20/bu) since early August to $8.78/bu delivered to Saskatchewan plants, green peas have increased $.40/bu to $8.06/bu delivered, according to early August weekly price reports from Saskatchewan Agriculture and daily reports from Statpub.

Over the past 10 years, the spot price for peas tends to fall on average between the first weekly price reported in August and the first weekly price reported for September, according to Saskatchewan Agriculture data. Prices of yellow peas have fallen over the month in five of the 10 years between 2005 and 2014, with the average drop of $.42/bu. Prices of green peas have averaged a $.52/bu drop within the same period, while falling in price during six of the 10 years.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

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