Seasonal stress on organic spot prices

mustard seed Mustard seed. Photo: File

By Jade Markus
OrganicBiz staff

Organic buyers have filled their needs ahead of this year’s harvest, which means producers looking to make last-minute sales face lower prices — especially as favourable crop conditions pressure the market.

Grain supplies are running tight, with little carry forward expected, giving a boost to new-crop prices, while special crops like mustard may feel some pressure.

“We’re basically bought up. If harvest comes when we think it will, we won’t need another bushel,” said Scott Shiels, grain procurement merchant at Grain Millers Inc., in Yorkton, Saskatchewan.

The new crop is just phenomenal looking. – Scott Shiels

Due to the seasonal nature of the market, lower demand is pressuring bids, but there are still producers looking to sell.

“Guys are seeing how much grain is going to be coming in, how much grain they have in their bins, thinking, ‘I should move what I have so I don’t have a storage issue,’” said Tristan Gill, commodity trader at Westaqua Commodity Group Ltd. in Vancouver, British Columbia.

Crop conditions in the province look great, he said, with most people expecting a big crop this year.

It’s a similar situation in Saskatchewan, Shiels said, despite some adverse weather.

“The new crop is just phenomenal looking,” he said.

Parts of the province are too wet following storms and flooding, while others have had hail, but Shiels expects about 80 per cent of crops are in excellent condition.

“With the heat last week the crops are just looking great,” he said.

New-crop prices could come under pressure from increased stockpiles, and organic mustard is one of those markets, one industry participant said.

“Compared to a year earlier, I think there will be carry-forward after harvest this year from last year,” said Walter Dyck, Alberta-based seed division manager of Wisconsin’s Olds Products Company.

Flax is another market that could see carry forward, but overall, prices for the oilseed remain strong.

“Flax has a little bit of carryout, but the market has kept the prices pretty tight,” said Shiels.

He added that oat and barley supplies are running low, which is keeping new-crop prices underpinned.

Organic farmers are expected to start harvesting slightly earlier than normal, Shiels said, kicking things off in the second or third week of August.