Running out of Runway

Even though farmers are out busy in the field and focused on the next crop, we often get questions at this time of year about selling the remainder of last year’s crop. For most farmers, there isn’t much left to sell but there are often a few tonnes held in reserve for a possible spring or summer rally, or just in case the upcoming crop runs into trouble.

The question is often phrased something like, “What are the things that could push the market higher?” or “Could we see a bounce yet?” At that point, we usually start listing possible (usually weather-related) factors that could give prices a lift but in most cases, our answer is that a meaningful rally at this time of year is quite unlikely. Of course, we then get the classic Jim Carrey line, “So you’re telling me there’s a chance.” Yes, there’s always a chance but the odds of a summer rally are quite low.

We often talk about seasonal price tendencies and one of the most consistent patterns is for prices to decline during the summer; no surprise to anyone. By summer, supplies are drawn down to the lowest levels all year, but buyers are typically waiting on the sidelines for the next crop. And this is also when farmers are finishing old-crop sales and cleaning out their bins. Both these typical behaviours weigh on prices through the summer.

If memory serves, the only exception we’ve seen to this pattern occurred in the summer of 2021, when a wicked drought was on everyone’s minds. Even then, prices for most crops had started to dip seasonally in May and June before turning quickly higher again as the drought took hold. But so far (fingers crossed), 2025 doesn’t look anything like 2021.

Besides a drought scare like we had in 2021, for prices to move higher at this time of year when they normally head lower, a large spike in demand would be needed. The problem for peas and lentils is that a late surge in demand doesn’t appear likely. The clearest indicator of demand is the CGC weekly data for crop movement. In particular, shipments from country elevators are a good gauge of the strength of demand as crops are pulled toward export terminals. One thing to note; the CGC data mainly reflects yellow peas and red lentils, and not so much greens.

The pattern of pea shipments in 2024/25 shows movement was stronger than usual in the first quarter of the year but then got very quiet in Q2 and Q3, even before the tariff threats. In the last few weeks however, elevator shipments have recovered back to average levels, a bit surprising given the gloom about Chinese tariffs. That said, movement tends to slide lower during the final quarter of the marketing year, which is now in front of us. A large spike in movement at this time of year would be almost unheard of, which makes the odds of a meaningful rally quite low.

The lentil chart is a bit different, in that movement tends to have two high points, one in the fall and another right about now (the week 39 spike arrived like clockwork again this year). This second surge is the main reason why the seasonal price index for red lentils tends to peak in Apr/May. Shipments of lentils had been strong through the first half of 2024/25 but actually got much weaker in the last eight weeks, aside from the week 39 bump. Unless there’s a strong recovery in the next few weeks, the final quarter of 2024/25 will be very quiet.

As far as we can tell, the CGC “tea leaves” aren’t pointing to an abnormally strong finish to the marketing year for peas or lentils. As a result, there’s little reason to expect prices will be able to escape the normal tendency lower, without a serious weather issue (“so you’re telling me there’s a chance”).

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