August 16, 2019

Market Developments

  • The condition of the Saskatchewan mustard crop continued to improve in the past two weeks, but it has still only reached 43% good or excellent. That’s better than last year’s final rating of 38% but well below the 10-year average of 65% good/exc. The mustard crop in Alberta, which accounts for just over one quarter of total area, has slipped in the past two weeks to only 29% good/exc, down from 31% in mid-July.
  • While the situation in Saskatchewan is more positive than a couple of weeks ago, we’re still comfortable leaving our yield forecast at 818 lb/acre, 5% below the 5-year average. This outcome would result in a 140-145,000 tonne crop, 30,000 less than last year.
  • The condition of the Montana mustard crop declined a bit further this week to 39% good/exc. That’s below the 5-year average of 50% good/exc and the 2018 rating of 66% good/exc. The declining conditions suggest a below-average US mustard yield, possibly enough to offset the higher 2019 acreage.
  • In June, Canadian mustard exports slipped to 9,400 tonnes, the lowest monthly total since September 2018, but it’s worth noting that mid-summer tends to be a slower part of the shipping season. In fact, this June total is in line with the 5-year average and better than the amount in June 2018. The seasonal decline in shipping to the EU was partly offset by an increase in volumes to the US. This brings the year-to-date total to 112,000 tonnes, ahead of 2017/18 at 105,000 tonnes and just slightly behind the 5-year average of 114,000 tonnes.
  • While exports of mustard seed are running ahead of last year, exports of mustard products (flour, meal and prepared mustard) are lagging. So far in 2018/19, exports have totaled 12,800 tonnes versus 13,800 tonnes in the previous year and the 5-year average of 14,000 tonnes. In fact, this is the slowest pace in our records going back to 2005/06, and the trend points toward an ongoing shift in processing and trade.
  • Mustard exports from Black Sea origins have started to slow down but have been running at much higher than normal levels. So far in 2018/19, 97,000 tonnes of mustard have been exported, up 26% from the 77,000 tonnes in Jul-May of 2017/18. The gains haven’t been uniform however, with Ukrainian exports down 16% from last year while Russia is up 21%. Meanwhile, Kazakhstan has moved into second place in the region with exports up 134% over last year. Russia remains the volume leader however at 56,000 tonnes versus 23,000 for Kazakhstan and 17,000 tonnes for Ukraine.

Outlook

There have been a few glimmers of strength in mustard lately bids, particularly with new-crop values. While the crop outlook has improved, there are still ideas that Canadian yields will be below average and limit supplies. We haven’t seen any confirmation from our sources but, based on satellite vegetation images, mustard yields in Russia and Kazakhstan could be down due to drought in key producing regions. Once harvest pressure is over, we wouldn’t be surprised to see some decent price strength, especially for yellow and brown mustard.