Pulse weekly outlook: Uncertainty pervades markets

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MarketsFarm — The price spread between green and yellow peas continues to widen in Western Canada, but whether or not that trend will continue remains to be seen.

Numerous outside factors lend a general air of uncertainty to the pulse market, according to a pulse trader.

Green peas typically trade at a premium to yellow peas, but that usual $1-$2 spread has widened to over $5 over the past few months. Green peas are currently trading around $12 per bushel, while yellow peas remain in the $6.50-$7 per bushel area.

“We’re at the point now where there’s so much stuff going on that’s not supply-and demand-related,” said David Newman of Commodious Trading in British Columbia.

Historical fundamental issues that would normally move prices “are just not there the same way they used to be,” he said.

While Canada is still an important player in the global pulse market, “we’re not the one setting the tone anymore.”

Increasing production elsewhere in the world, including the Black Sea region, was one factor lessening the Canadian influence on global markets.

However, the unforeseen effects of political decisions in India, China and elsewhere added additional uncertainty to market projections, according to Newman.

Given that air of uncertainty, he felt there was little benefit in doing a deep analysis into where prices may be heading.

Rather, he recommended keeping an eye open for opportunities that outweigh costs — “when it’s positive, you take it.”

— Phil Franz-Warkentin reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.


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