April 14, 2019

Market Developments

  • With the potential for some western Canadian acreage to get shifted out of canola, mustard is a candidate for a few of those fields that had been prepped for canola. It might not amount to a lot of acres but we have bumped up our forecast of mustard seeded area to 450,000 acres, now only 11% less than last year.
  • Based on average yields, this extra 25,000 acres would add roughly 10,000 tonnes to 2019/20 production and leave supplies very similar to the current marketing year.
  • The difference in 2019/20 is that with an expected shift to more yellow mustard production, supplies of brown and oriental could contract next year. If so, it would bring prices for the three classes of mustard into a narrower range.
  • In January, Canadian mustard exports improved slightly to 9,900 tonnes, the largest total since 2009/10 for the (normally slow) month. Volumes to all major destinations were roughly steady from the previous month.
  • The year-to-date pace of 58,600 tonnes is now ahead of last year’s 54,900 tonnes but is still slightly behind the 5-year average pace of 60,000 tonnes. With another seasonal peak still ahead, we may need to bump our full-year forecast back up from our currently cautious estimate of 115,000 tonnes.
  • The USDA doesn’t provide a forecast of mustard seeding intentions in its Prospective Plantings report and the first concrete estimate won’t show up until its June Acreage report. In the meantime, we’re expecting that the slightly softer 2019 mustard market will have discouraged a few acres.
  • As a result, we’re forecasting US seeded area at 90,000 acres, a 12% decline from last year. Even though a shift from yellow to brown mustard was starting to occur in the US last year, the current price relationships will likely cause a move back toward more yellow mustard in 2019.

Outlook

Mustard bids have started to slip again in western Canada as enough farmers have become impatient and are looking to unload some of their old-crop supplies. It also appears that the usual spring increase in mustard exports may have already been sourced and more aggressive bids aren’t needed. We would expect this flat to possibly softer price pattern to remain in place for the remainder of 2018/19. New-crop bids are mostly steady but we’d expect farmers are contracting only smaller amounts at these levels.