New-crop lentil bids in Western Canada remain sluggish, with ample supply and the lack of interest in forward pricing weighing on prices, said an analyst.
"Lentils are a dead market for the foreseeable future," said Mike Jubinville, an analyst with ProFarmer Canada in Winnipeg.
Some of the weakness in new-crop bids was associated with the large supply of Canadian lentils, he said. The production of red Canadian lentils, which is two to three times bigger than green, has contributed toward the ample supply, he said.
Pulse crops, he said, are traded in one- to three-month cycles compared to other crops, which limits forward pricing and risk. The limited amount of risk in lentils is also moving prices down, he said.
Jubinville remains bearish overall on lentils in the long term. It could take another year to deplete current supplies and significantly move prices upward.
New-crop bids for green lentils were 24 to 25.5 cents a pound, compared to 25 to 25.5 cents last month, according to Prairie Ag Hotwire. There were no new-crop bids for red lentils available.
Spot bids for green lentils are currently in the 24-25.5 cents a pound range, down anywhere from one to two cents from last month. Meanwhile, spot bids for red lentils were going for between 16 and 19 cents, compared to 16.5-17.5 cents per pound last month.
With spot bids for green lentils higher than red lentils, that may prompt farmers to grow more green lentils than red, pushing green lentil prices down and adding to the ample western Canadian lentil supply, Jubinville said.
However, despite abundant supply keeping lentil prices sluggish, the market will be taking cues from India’s crop. Concerns over dry conditions in India have been raised.
If India’s harvest is smaller than expected, that may encourage some fresh demand and underlying support for prices, Jubinville said.