FEBRUARY 2017

THERE REMAIN STRONG DRIVERS FOR SPRING CROPPING AND PULSES ARE AN INTEGRAL PART OF THE OPTIONS AVAILABLE ...

DRILLING

“Exporters of beans have been struggling to find buyers in the human consumption market and opportunities now appear closed until the new crop harvest, except for some container shipments,” comments Roger Vickers, Chief Executive of PGRO. “Peas appear to be in shorter supply than had been anticipated, particularly good quality blues.

“Uncertainty exists as to how much land will be committed to pulses in the UK in spring 2017 with different reports suggesting either a further slight increase or a slipping back.

“Whilst the UK trade is slightly pessimistic in terms of area expectations in 2017, there remain strong drivers for spring cropping and pulses are an integral part of the options available with significant value in the rotation over and above their commodity price.

“Winter sown beans look generally good, and some spring sowings have already been made, however, the majority still awaits the right soil and weather conditions before drilling.”

Franek Smith, President of BEPA, reports the Australian Faba bean crop has apparently been the largest in living memory on the back of terrific growing conditions. This has inevitably impacted the market, though perhaps not as much as might have been anticipated. The Baltic bean crop for 2016, based on French estimates, indicates production reached 212,000 tonnes (3-4 times that of 2014 crop), however, the region has yet to establish a reputation for consistent good quality. French Faba bean production fell to 238,000t (2/3 of the 2014 harvest levels) but exports to Norway have risen significantly. Early sown peas in France look good.

The market for Human Consumption Beans is effectively over, with volumes thought to be approximately half that of the 2015 crop. Willing sellers of quality samples are difficult for traders to find and the buyers are simply not there. The availability of currency has further tightened, and the competition of better quality Australian crop strangled the end of the market for UK traders. Initially, Australian crop was available at just a small premium to UK produce but this premium has now eroded, further discouraging buyers of UK produce. The consequence of this is the complete erosion of any human consumption premium available presenting unacceptable risk in trade. The remaining pockets to be sold will very likely head for the feed market. New crop bean business is being traded with a base price of circa £150/t ex (based on a premium of £20-22/t over November wheat). Any human consumption premium is unknown at this stage - possibly an additional £15-£25/t.

Feed beans continue in demand though it may not be long before the processors start to slow down as the spring arrives. Prices briefly topped £170/t in mid-February before slipping back slightly. It could be that the next 6-8 weeks represent the best opportunity to sell ahead of the new crop. It is suggested that current oilseed rape and comparative values will continue to drive the compounder’s interests. New crop feed trade is possible with interest starting at a premium of £20-£22/t over November wheat futures. The markets report a groundswell of interest in the continued supply of UK beans into the feed market going forwards. This would be a welcome intent of a longer-term commitment to the UK crop.

Marrowfat peas remains unchanged from recent reports. Open market sellers may be finding it hard to move produce into premium markets and may need to sit on crop for a while longer. Limited contracts for 2017 production are available. Quality parameters may for be very specific contracts with wide movement windows. Values circa £235-240/t ex.

The market for Large blue peas may now be looking short in this sector. Interest remains strong for good quality samples. Values are rising slightly and it is anticipated the crop area may increase in 2017. Feed quality is discounted to beans but both have risen and values are circa £155-£160/t ex. Second quality bleached samples can reach £190/t ex and the very best quality first grade is now very hard to find. Contracts for crop 2017 are available with likely min/max offers circa £170-£200/t ex with options for movement before March.

Yellow peas are also now short/non-existent and the crop area for 2017 harvest is expected to rise from a very low level after two seasons of relatively good performance in the wider international markets and fewer quality issues for growers. Contracts are available for crop 2017 with nominal values estimated at circa £170/t plus.