PULSE MARKET UPDATE 7 JULY 2018
Roger Vickers, Chief Executive of PGRO, comments that as the summer heat continues, the overwhelming discussion is about impact on yield potential. With most pulse growers having had little rain for the last 6 weeks, soil has in many places gone from holding 98% of its water capacity to significantly less than 10%.
Whilst the winter bean crop has generally been looking excellent for months, there is considerably more variability in spring sown crops.
Some of the later sown beans - though by no means all - have undoubtedly suffered and are starting to look poor. Others, however, appear to have been quite resilient in the conditions.
Pea crops have also looked good, but those flowering through in the peak heat will be reducing seed set numbers and, in some cases, complete node abortion has been seen on the later flowers.
On the plus side, aphid levels have been low to date and there has been very little disease. Winter beans were exposed to heavy bruchid numbers, but the impact of the later sowing crop and flowering of spring crops is hard to judge so far.
Franek Smith, President of BEPA, reports that recent crop movements for beans are largely from trades that took place a long time ago, and the trade reports little new activity from old crop sellers at this time. It is believed the supplies are largely exhausted and all eyes are now on the new crop and estimating what it might bring.
For feed beans, hot temperatures mean hungry fish and this growing industry remains hungry for beans – this brings a reasonably secure long-term outlook for growers. The UK stock feed market also remains an enthusiastic user and has so far soaked up all the beans available to it. That said, soya has come down slightly in price, and the availability of other mid-range proteins has increased. Beans have recently risen as high as £175/t ex-farm, but have still to find their value for the main season ahead, hence this is not really news at this time of the year.
Human consumption beans have seen negotiations with UK buyers of bean exports at a stalemate it seems. Buyers are more keenly interested in establishing the area sown, quality and quantity likely from harvest in all production areas. Sellers, on the other hand, are holding out for higher prices. Some early positions were taken at £184 /t ex-farm, but it now seems that even £200/t is not enough to tempt sellers - wary perhaps of the yet unharvested supply potential. Everything is likely to change as soon as the first crops come in. Demand will be there.
There is little news in the combining pea market. The focus for growers has to be on delivering quality – which at this time means hoping that the drying pods are not exposed to alternating wet and dry conditions, and targeting about 18% dry matter average for harvesting. Once harvested, they should be handled gently and slowly dried down to preserve the colour.
Any sellers of old crop marrowfat peas will by now be finding it very hard to find them a home, unless they are exceptional in all critical aspects, colour retention, soakability and cooking qualities. Prices would range from worst to best between £185-£250/t ex-farm. New crop contracts are available for crop 2019 with values at around £300/t ex-farm before any deductions for quality issues.
Large blue peas bring more flexibility for the market destinations than marrowfats, hence are easier to move. The quality criteria remain the same, however, and the price range is perhaps £165-£230/t ex-farm New crop 2019 contracts are available based on quality criteria being met and a min/max value of £200-£250/t ex-farm.
Yellow peas are most affected by the Indian trade tariff impositions as yellow/white peas compete in the international market with larger producers such as Canada, France and the Ukraine. There is no immediate local demand and contracts for 2019, whilst available, are harder to find.
Baltic production areas have experienced mid to high 20oC temperatures and dry conditions similar to the UK. With production within about 150 km of the coast, concerns about the impact on supply are similar to those in the UK.
Similar problems exist in Germany and central European production areas.
Australian early crop reports are good, but on a reduced crop area, so there is no immediately larger threat to export opportunities than normal.
Canadian producers of peas are expecting a 32% drop in exports to India as import restrictions continue and a significant increase in carry over of yellow peas. This will put pressure on the world market, hence premiums of recent times over historic value are likely to be fully eroded.