(Resource News International) — Lentil bids in Western Canada are starting to see some strength as producers are reluctant to make sales given the uncertain crop conditions this summer.
However, actual production may still be sufficient to meet the average demand, which could limit the upside potential.
Prairie farmers had intended to increase planted lentil area by nearly a million acres in 2010, according to recently released Statistics Canada data pegging intentions at 3.36 million acres, up from 2.4 million the previous year. However, actual acres are likely closer to unchanged given the excessive moisture this spring.
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Using a conservative estimate that 10 per cent of the lentils were unseeded and an additional 10-15 per cent were flooded out, it would leave lentil acres at around 2.5 million, according to Les Aubin, country manager with Walker Seeds at Tisdale, Sask.
Using average yields, he estimated lentil production on the year could still come in at around 1.4 million tonnes, which would be up from the average annual demand over the past four years of 1.1 million.
From a quality standpoint, “a lot of what’s out there looks pretty decent,” aside from the fact that it’s late, he said.
As a result, Aubin didn’t think the market was yet short of lentils. Red lentils in particular should have enough supply, he said, although Eston green lentils may be tighter given the fact that the crop is grown in some of the wetter areas of Saskatchewan.
While weather issues over the growing season could still change the overall supply situation, Aubin said pricing will depend on the demand that comes forward and whether end-users are willing to pay the prices for which producers are holding out.
“It will be an interesting summer to say the least.”
Lentil bids in Canada have increased by more than the international market, making it difficult to sell into the export market, he said.
Top-end spot bids for green lentils in Western Canada can currently be found in the 24.5 to 32.5 cents per pound area, depending on the variety, according to Prairie Ag Hotwire data, while red lentils top out around 24.5 cents. New-crop bids are generally a few cents per pound lower.
