What Do Seasonals Have to Say?

At this time of year, most focus is already on the upcoming crop, but there’s often some of last year’s crop still left to be sold. The question is whether it’s better to hold on for one more late-season rally or empty the bins. While there’s no guaranteed answer, seasonal tendencies are a helpful indicator. We’ve noticed over the years that prices tend to follow seasonal patterns most closely in years when supplies and demand are relatively well-balanced and 2024/25 seems to fit this situation. Of course, seasonal price tendencies aren’t foolproof, but there’s a reason the patterns exist as they are the result of actual price movement over many years and aren’t just a theoretical idea.

As a refresher, seasonal price indexes show how prices tend to move throughout the year. Seasonal patterns occur because of well-established and repeated behaviour by farmers and buyers. Each crop has its own specific seasonal pattern, but there’s one common tendency that occurs consistently for all crops, and that’s the decline in prices over the summer.

A seasonal index chart is interesting but doesn’t provide a lot of context about price direction. For example, what does it mean when the red lentil index moves from 0.9957 in mid-March to 1.0250 by mid-April? As a result, we’ve developed a way to show what those changes could mean in terms of actual prices. We’ve used historical prices and seasonal indexes to calculate how current prices would respond over the next 4 weeks, 8 weeks and 12 weeks if they follow seasonal tendencies.

Using yellow peas as an example, the seasonal highs tend to occur in the first four months of the calendar year, including two “peaks” in late February and late April (prices this March were hit by Chinese tariffs, an abnormal occurrence). The index then declines more-or-less steadily from mid-May to mid-August, then moves sideways for a month and starts turning higher again in mid September.

When we apply the seasonal tendencies against the current prairie-wide yellow pea bid of $9.71 per bushel, prices (using the average seasonal movement) would remain steady for the next four weeks but then start to slip by eight weeks out and decline more severely by the 12-week timeframe. Based on the percentage changes in the seasonal index, the yellow pea bid would be over $1.00 per bushel lower 12 weeks from now. The maximum changes that have occurred at this time of year would mean one more bump in prices in the next four weeks but then turning sideways and ultimately lower. Keep in mind, the yellow pea market in 2024/25 is facing serious headwinds due to tariff issues.

If red lentil bids follow the normal seasonal tendency from this point forward, the average seasonal movement would mean the prairie wide bid would show modest gains four weeks out but beyond that, the seasonal summer declines would mean a slight dip by eight weeks and a larger drop by the 12 week period. Applying the maximum increase for this time of year would mean noticeable gains, although current market conditions would suggest that outlook is less likely.

We want to stress that the prices shown in the Seasonal Market Direction charts are not price predictions. Rather, they show how prices would respond if they would follow the seasonal patterns.

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