Market Signals from Weekly Data

More market transparency, information about how crops are being traded, is always a desirable goal. Timely information about sales and prices helps us do a better job of tracking supply and demand developments and gives us a clearer picture of what’s ahead. Ideally, if farmers and grain merchants would both provide information about the crops they’ve sold and the prices they’ve received, it would fill in a lot of the missing pieces in the market puzzle. But we’re not holding our breath.

Until that happens, we have to work with the information that’s available. While StatsCan is the data source most often mentioned (and criticized), the Canadian Grain Commission provides useful weekly data which offers some clues about market status and strength. This data includes commercial inventories at country elevators and at export terminals, farmer deliveries, shipments from country elevators and exports, among others.

Admittedly, there are some gaps in the CGC data but in our view, the three most important are farmer deliveries, elevator shipments and exports. If we think about the export pipeline, the leading market signal comes from the pace of farmer deliveries, as supplies are pulled into the handling system. Next, the weekly shipments out of country elevators are a strong indicator of how much of a crop is needed at the ports or to be moved south into the US or Mexico. Finally, weekly exports are reported, which shows how much is on its way to other countries. Other bits and pieces of data add more context.

When we look at what these signals mean for peas, the data shows farmer deliveries were above average early in 2024/25, but volumes already started to drop below average in late November. And in the last few weeks, deliveries have been even slower, an advance signal that exports in the weeks ahead will get very quiet. The chart below with pea shipments out of country elevators shows a similar picture and confirms the slowdown.

 

The slow movement of peas is a clear signal of weaker demand. While that situation could change before the end of 2024/25 (the line for 2023/24 shows what happened when India dropped its tariffs and returned to the yellow pea market), movement of peas generally slows later in the marketing year. And if fewer peas are needed, a meaningful rally becomes less likely. Keep in mind, the CGC data for peas mainly includes yellows, with greens moving mostly by container.

The picture for lentils is more positive. The CGC data mostly includes red lentils as that’s the main type shipped through the elevator system. Weekly farmer deliveries have been close to or above average levels, which signals a strong pull into the elevator system. When it comes to shipments from country elevators to various locations, weekly volumes were slow to start 2024/25 but since the beginning of October, have remained mostly above average, sometimes well above average.

 

These above-average lentil shipments then turn into strong exports, although export totals can vary considerably from week to week. In general, these signals reveal that global lentil demand is still quite strong and raises the potential for higher prices, especially as on-farm supplies are drawn down.

Of course, the situation in western Canada is only one part of the global market, but it is a large piece of the puzzle for pulse crops. And the value of the information means we continue to advocate for more market transparency in Canada and elsewhere.

Pulse Market Insight provides market commentary from Chuck Penner of LeftField Commodity Research to help with pulse marketing decisions.