Current Sales Position:
We are sold out (100% sold) for 2017/18 old crop chickpeas.
We are 15% sold for 2018/19 new crop chickpeas.
There hasn’t been a whole bunch of news in the markets this past week as the chickpeas harvest is hitting full stride and most of the market’s attention is on that.
There have been a few headlines about El Niño in the news lately and so we wanted to help clear the air about what this means for pulses crops.
El Niño is a weather pattern that happens when waters in the Pacific Ocean start to warm up.
For the likes of India, this means that if an El Niño pattern occurs, monsoon rains come in below-average. Obviously, this might affect Indian crop production potential. This year, should El Niño materialize this fall, it’ll likely have the most impact on the rabi (or winter) growing season in India which will just be starting to get planted at the same time.
But will it happen?
Earlier this August, the Indian Meteorological Department said El Niño will have no effect on this monsoon.
Conversely, Australia’s Bureau of Meteorology says that there is a 50% chance of El Niño forming in 2018.
One could argue that there has been some effect on Indian monsoon rains as current rainfall in the country is currently 9% behind the average. Should El Niño persist, there could a bit of impact on India’s pulse kharif harvest, which is already smaller year-over-year thanks to the smaller acreage.
Thus, memories of small Indian pulse harvests from 2014 through 2016 come to mind when thinking of El Niño’s impact.
This is mind, Indian chickpea prices have appreciated over the last few months, getting back to points not seen since January. It appears that the actions of the Indian government have paid out.
Chickpeas Harvest Update
The USDA reported last Monday that 25% of Montana’s dry beans crop (including chickpeas) has been combined. This is an advancement of 17 points week-over-week but way behind last year’s pace of 70% harvested and the seasonal average of 52% harvested.
Going into tomorrow’s USDA Crop Progress report, the five-year average for Montana’s dry beans/chickpeas harvest progress is 62%.
To the north, approximately 3% of the Saskatchewan chickpeas crop is in the bin, which 2 points behind the 5-year average of 5%, but 1 point ahead of the harvest progress at this time last year. Heading into next week, the 5-year average for chickpeas harvest progress in Saskatchewan is 7%.
In talking with a few producers, we’re hearing some surprising yield reports, considering the dry conditions most chickpea producers in Western Canada faced this growing season. Very concretely, yields are near average or slightly below average.
With the pace of chickpeas harvest moving along, we’re seeing some of the usual harvest pressures at this time of year. However, this has been amplified by the currency situation in Turkey, as well as the fact this time a year ago, India wasn’t taxing chickpea imports.
As a reminder, from our 2018 Second Half outlook for chickpea, we said that seasonality is an important factor that comes into play around this time of year. For a number of crops, including chickpeas, late August to October is when a seasonal low typically occurs, as harvest pressure kicks in. Prices are expected to rebound in November and December once the harvest campaign is complete. We still think that this is still the case today.
On the major reports front, on Friday, August 31st, StatsCan will release their first 2018/19 production estimates, from which we’ll be doing our regular GrainCents in-depth analysis on. We’re also expecting an Indian production estimate out soon as well.
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August 19– Chickpeas Weekly GrainCents Digest
August 13– Chickpeas Weekly GrainCents Digest
August 5– Chickpeas Weekly GrainCents Digest
July 29– Chickpeas Weekly GrainCents Digest