Current Sales Position:
We are 90% sold on old crop 2017/18 yellow peas.
We are 80% sold on old crop 2017/18 green peas.
We are 20% sold for new crop 2018/19 yellow AND green peas.
This week, we got the USDA’s second projection for 2018/19 harvest, but we’ll have to wait till the September WASDE report to get an estimate on the peas crop. Back in June, we posited that the American farmers will harvest 840,688 MT of peas which is up 19% year over year.
Last week, North Dakota’s peas harvest progress is pegged at 28%, which is up 18 points week-over-week. However, this is way behind last year’s pace of 46% harvested and the 5-year average of 37%.
In comparison, Montana’s peas harvest is estimated at 35% complete, which is an advancement of 16% week-over-week. This is behind both last year’s progress of 76% and the 5-year average of 57% harvested.
Going into this afternoon’s USDA Crop Progress report, the five-year average for North Dakota’s and Montana’s peas harvest progress is pegged at 57% and 72%, respectively.
On the crop conditions front, 80% of North Dakota’s peas crop is rated G/E, which is a drop of 3 points week-over-week. That rating is ahead of both the seasonal average of 65% and last year’s G/E rating of 19%. For today’s report, the five-year average for North Dakota’s and Montana’s peas G/E ratings is 80%.
Next door, 67% of Montana’s peas crop is rated G/E, up 1 point from the 66% reported last week. This rating is 8 points ahead of the 4-year average of 59%. We need to point out that the USDA has not released crop condition ratings of week 31 last year, as the local harvest was nearly wrapped up.
On the pricing front, U.S. green and yellow peas prices drifted lower in the past few weeks. The small premium of yellow peas prices over green peas has vanished.
Comparably, average yellow peas prices delivered to Saskatchewan elevators are stable, sitting around $6.13 CAD / $4.70 USD per bushel. Comparably, green pea prices in Saskatchewan slid down 10¢, now sitting at $8.10 CAD / $6.20 USD per bushel.
The Saskatchewan peas harvest is 8% complete, with producers in the southern areas of the province leading the way with between 14% and 18% of their peas crop harvested. Going into this week, the seasonal average is 12% harvested for Saskatchewan’s peas crop.
Next door in Alberta, the peas crop rated G/E is sitting at 60%, down 3 points from last week ago and 7 points behind the 5-year average of 67%.
We’ll get the first official estimate of the size of the Canadian lentils harvest will be indicated on August 31 when StatsCan gives us their first estimate. A few weeks ago we reported that AAFC’s estimate for 2018/19 Canadian peas production is pegged at 3.61 MMT.
The actual number may come in smaller though, considering that cumulative precipitation shows a moisture deficit in both Alberta and Saskatchewan. Specifically, for the latter, the precipitation deficit widened by 5% or 2mm (or 0.1 inches) to 40 mm (or short of 1.6 inches).
Saskatchewan saw some much-needed moisture this week though. Topsoil moisture conditions improved slightly, but 40% of the province’s cropland is still considered to be in short supply, while another 18% is rated very short. While the rain was welcomed in some areas, it may be too late to benefit the south, where crops are rapidly drying down.
Most crops remain in fair condition, although later-seeded crops need rain to help heads and pods fill. Reported yields so far range from average to well-below average. Unfortunately, the hot, dry conditions are forecasted to stick around throughout the rest of August and into the fall, according to Environment Canada. Average to above average temperatures are expected to continue to bake the Prairie provinces.
India Gets More Bullish?
In India, ample pulse supplies are weighing on local peas prices, which are edging lower.
Last week, we reported that the Indian Ministry of Agriculture (IMA) said that Indian farmers have seeded about 9.9 million acres of Tur pea crop, the local peas variety, up from the 9.7 million acres seeded at this time last year.
Specific to Tur, the local peas variety, the IMA said that Indian farmers have seeded about 10.42 million acres slightly behind up from the 10.44 million acres seeded at this time last year. This is also about 11% ahead of the 5-year average of 9.40 million acres seeded by this time.
According to some reports, as a larger area of the Tur crop in the ongoing Kharif growing season, prospects of a larger peas crop is causing some anxiety. Some growers have begun to lobby the central Indian Government to curb all forms of peas imports, to keep prices stable. Therefore, it might not be a surprise if India extends the current import ban set to expire on September 30.
India Missing Rains
Through August 9th, the Indian Meteorological Department (IMD) pegged cumulative monsoon rains at an average of almost 19 inches for the whole country, which is 10% behind the average. This is up from last week when we saw cumulative rains in the country at 7% behind the average.
In the first week of August alone, India got only 1.7 inches) for the whole country, which is 33% behind the normal for this period. The situation got worse in central India, including states like Madhya Pradesh, who is a major peas producer, which got only 1.43 inches the same week. This amount is 55% behind the normal for this period.
The IMD indicates that rainfall for the country as a whole during the second half of the Monsoon Season (August to September) is likely to be 95% of the period average. Other weather agencies are less optimistic, predicting that India’s June-to-September monsoon season is likely to see only 92% of the period average rainfall.
According to the IMD, Indian farmers have now seeded about 30.6 million acres of pulses in the Kharif crop, down almost 3% or nearly 1 million acres from the nearly 31.6 million acres seeded at this time last year. This is also 18% or 4.6 million acres ahead of the 5-year average of 26.1 million acres.
Expectations for Peas Prices
Looking forward though, we think that the peas market has more upside potential due to a lower harvest in Canada. Chinese demand is another bullish factor supporting new crop prices going forward.
Also, the potential of a smaller Indian Kharif pulse crop could provide some support for peas prices. We will have a better perspective on this when the IMA releases the 4th Advancement report on the 2017/18 Indian crop production. We need to be cognizant though that Indian demand is going to be a bit wacky given the imminent extension of the current import ban that expires on September 30. We’ll be monitoring these factors closely in the weeks ahead.
Have a great week!
– Brennan, Garrett, and Adrian
August 5– Peas Weekly GrainCents Digest
July 29– Peas Weekly GrainCents Digest
July 22– Peas Weekly GrainCents Digest
July 15 – Peas Weekly GrainCents Digest