Unknowns keep lentil bids strong

CNS Canada — Lentil bids in Western Canada continue to show strength, but with the size and quality of this year’s crop still very much unknown, the highs may be in for the time being.

“I don’t think there is anyone who really knows exactly what’s out there,” said David Newman of Victoria-area pulse trading and processing firm Commodious Trading.

There was no consensus, he said, on how much exportable product there was, or what the quality was, especially as there is still some unharvested area. The timing of the harvest, together with where and when bad weather hit over the growing season, has added to the uncertainty.

Current spot bids top out at 30 cents per pound for No. 1 red lentils and as high as 38 cents per pound for large caliber No. 1 green lentils, according to Prairie Ag Hotwire data.

Those end-users who need high-quality lentils will continue to pay up to secure those supplies, but Newman noted a wider-than-normal spread between top-end and lower-end bids.

“There is no reason why the markets need to collapse,” he said, pointing to the relatively supportive fundamentals and solid demand. However, on the other side, the top ends of the ranges may be in for the time being.

Red lentil prices have already come off from their highs, and will come off a bit more, said Newman. The next wave of pricing there will depend on outside factors, he added, such as Indian and Australian production and how much of the demand shifts to lower-quality supplies.

Newman likened the current situation to 2010, which saw lentil values rally sharply. However, many people then learned buying poor-quality lentils at high prices was not the best idea — and unlike 2010, the current market is looking more rangebound.

Newman noted many buyers were also reasonably covered for now.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.