September 13, 2019

Market Developments

  • In the late August StatsCan crop estimate, 2019 mustard production was pegged at 156,000 tonnes, down 10% from the 2018 crop. This is in spite of an above-average yield of 885 lb/acre, up 100 pounds from 2018, as the 21% reduction in seeded area more than offset the higher yield.
  • StatsCan doesn’t release a breakdown by type in this report but based on the June seeded area estimates and yields by type, production would come out at 65,000 tonnes each for yellow (down 16% from 2018) and brown (unchanged) mustard, with 25,000 tonnes (down 14%) for oriental mustard.
  • The July 31 StatsCan stocks estimate for mustard came in at 73,000 tonnes, a 20,000 tonne increase from the previous year and one of the more comfortable levels from the past five years. This carryover will help offset the smaller 2019 crop, although these inventories are more likely made up of oriental and brown mustard. Not as much of the old-crop carryover will be yellow mustard and the large drop in that portion of the 2019 mustard crop will leave yellow supplies low.
  • Mustard exports in July were up slightly to 9,600 tonnes, ahead of last year and the 5-year average for the month. This brings the full-year total to 121,000 tonnes compared to 112,000 in 2017/18 and nearly in line with the long-term average. Notable year-over-year increases were seen in exports to the US, Switzerland and France while exports to Belgium declined.
  • As of early September, harvest progress for mustard was only 13% complete, the slowest in our records going back to 2000. That’s also far behind 53% last year and the 5-year average of 39%. While mustard can be somewhat resistant to adverse weather, it’s worth noting that mustard grades took a beating in both 2014 and 2016, when roughly 35-45% of the crop didn’t make a 1Can grade.

Outlook

Canadian mustard bids had been relatively steady even before the harvest delays became a concern. So far, there hasn’t been much (or any) price response to the slower harvest but if the delays are extended, that’s likely going to change. As we’ve said in previous reports, the largest price response would likely show up for yellow mustard, based on tighter old-crop supplies and reduced 2019 production.