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.

Indian Market Update

With all the other things going on in pulse markets, the situation in India has almost faded into the background, but it remains a critical part of the outlook. India’s rabi harvest includes lentils, peas and chickpeas and is now in its late stages. The outcome of this rabi crop is one of the key factors in the Indian government’s decisions about allowing or restricting imports.

Earlier in March, Indian Ag Ministry released its first estimates of the 2025 rabi harvest, which showed modest increases for all three pulse crops that are important to the Canadian market. In this report, the government’s initial estimates are based on average yields and this year, that’s a reasonable assumption. Growing conditions have been generally favourable across most producing areas of India, which should put average yields within reach.

Production of gram (desi and kabuli chickpeas) was reported at 11.54 mln tonnes, up 4.5% from last year but still lower than the 5-year average of 11.97 mln tonnes. The lentil (red) crop was pegged at 1.82 mln tonnes, which would be only 1.5% better than last year but well above the 5-year average of 1.44 mln tonnes. Pea production is not broken out separately and is included with “other rabi pulses” and that category was reported at 1.90 mln tonnes, 6.7% larger than last year.

As with any government crop estimates, there’s always plenty of disagreement about the numbers. For the last few years, private estimates in India have been consistently lower than the government numbers, often by a lot, and this year is no exception. These sources suggest the chickpea crop is too large by at least a million tonnes, if not more. For lentils, the differences are 200-300,000 tonnes. If domestic production really is lower, the Indian government might need to rethink its import tariffs in the coming months, depending on supply levels and prices.

For now though and regardless of the exact number, the Indian government is already making moves to limit imports. Earlier, an 11% tariff was imposed on lentil imports and this week, a 10% tariff was placed on chickpea imports. Tariffs at these levels won’t stop imports but will make them more expensive and are intended to support prices for Indian farmers. Unfortunately, they also tend to lower prices for farmers in exporting countries. That became clear when Canadian lentil prices dropped as soon as Indian tariffs were imposed.

There is still no word on Indian tariffs on pea imports, with that deadline pushed back to May 31. That said, the fact that a tariff was placed on desi chickpea imports and Indian pea prices are at multiyear lows suggest a tariff on peas is certainly possible after that deadline. If it does happen, that’s another serious roadblock for the Canadian pea market.

Indian imports of peas have already declined in recent months as inventories built up in port warehouses. Large import volumes aren’t expected, even if tariffs stay at zero. Still, with the loss of the Chinese market, any further decline in demand isn’t helpful. There was a bump in India’s red lentil imports from Australia earlier but that surge is already fading. The 11% tariffs will still allow Canadian lentils to trade into India, but at a lower price. The situation can always change, especially if the Indian government is overestimating rabi pulse production and needs to reverse its tariff decisions. But if that doesn’t happen, Canadian pea and lentil exporters will need to look for other destinations, adding another challenge for 2025/26.

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