I hesitate to comment but there are two sides to this yellow pea market. Acreage is down about 10% and was down a similar amount last year. I don't have a handle on yield yet but it somewhere around 30 bushel per acre in my opinion.
In 2021 USA had very little pea production and the pet food demand and frac demand came to Canada. That isn't the case this year as they have a reasonable crop at the front end of the marketing year anyway. The other issue is Chinese demand is poor. In 2021 there was short covering for sales already headed to China sold say winter 2020/21 and covered in summer 21/fall 2021 after production was short. China is our largest buyer of yellow peas, or at least was traditionally. Russia is now suppling them. Cheaply. This is also new and was not the case in 2021. Note India was also a bit demand sink and they are now virtually zero for last 5 years. To my knowledge there is very very little bulk vessel business to China this fall and this limited demand will also tamper bullishness in the pea market. Remember in the past yellow pea demand to China was as high as 2.3 Million MT in 2020 crop and 1.2 Million MT this past crop year ending last week. This year likely lower again. They prefer our quality but price wins in many cases.
I think growers will NOT chase to sell at $10/bushel (but there are some sellers now at these values) but the demand side is not great story either. This can go either way but I have zero confidence this will rally to the $17-18 we seen in 2021 either. Zero.
Note the official stats show we carried into this crop year about 500,000 MT from last year as growers didn't feel the price matched there target. This doesn't help either. I could spitball total demand at 1.5 MMT and we are carrying in a 1/3 of that.
This all can change over time and likely will. But as a snapshot today its hard to get bullish when you look at the facts in front of us.
In 2021 USA had very little pea production and the pet food demand and frac demand came to Canada. That isn't the case this year as they have a reasonable crop at the front end of the marketing year anyway. The other issue is Chinese demand is poor. In 2021 there was short covering for sales already headed to China sold say winter 2020/21 and covered in summer 21/fall 2021 after production was short. China is our largest buyer of yellow peas, or at least was traditionally. Russia is now suppling them. Cheaply. This is also new and was not the case in 2021. Note India was also a bit demand sink and they are now virtually zero for last 5 years. To my knowledge there is very very little bulk vessel business to China this fall and this limited demand will also tamper bullishness in the pea market. Remember in the past yellow pea demand to China was as high as 2.3 Million MT in 2020 crop and 1.2 Million MT this past crop year ending last week. This year likely lower again. They prefer our quality but price wins in many cases.
I think growers will NOT chase to sell at $10/bushel (but there are some sellers now at these values) but the demand side is not great story either. This can go either way but I have zero confidence this will rally to the $17-18 we seen in 2021 either. Zero.
Note the official stats show we carried into this crop year about 500,000 MT from last year as growers didn't feel the price matched there target. This doesn't help either. I could spitball total demand at 1.5 MMT and we are carrying in a 1/3 of that.
This all can change over time and likely will. But as a snapshot today its hard to get bullish when you look at the facts in front of us.
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