PULSE MARKET UPDATE - June 2024

Commentary
Early estimations of 2024 crop were quickly realised to be on the high side by the time the Spring period arrived and pulse crop prices spiked as short sellers rushed to cover their positions.
This forced those with options for the use of alternative protein sources to question the place of UK production in feed rations and demand started to slow in the face of competition from more competitively priced alternative mid-range protein sources.
Now, in the run up to harvest 2024 demand is incredibly low and supplies are in the main making their way from trade stocks, almost all farm supplies having been exhausted. With domestic stocks virtually non- existent there has been some importation of feed peas to make up the remaining feed requirement. Feed peas are a second preference to feed beans for a number of reasons, including processing issues, but can fulfil a need if required at the right price.
Prices remain high but have fallen from their peak of 6 weeks or so ago.
Crop 2024 is now on the near horizon with the first dry pea crops likely just 5 weeks away depending upon the weather. It looks unlikely however that bean harvests will begin much before the end of August this year.
Crop condition in general looks surprisingly good, although there are always exceptions. Crops that were sown into good soil conditions, even though they may have been late, have thrived on the largely cool moist conditions of this spring and the late arriving sunshine is now pouring energy into them. This could have been so different given the generally atrocious early spring rainfall and there will undoubtedly be some crops which are now flattering to deceive. Overall however yield per unit area looks likely to be significantly better than for the last few years, improving trade confidence of many. Of course, there is still away to go and the prevailing weather over the next few weeks may yet still have a big impact. Perhaps a bigger question is how much area has been sown to pulses in 2024. Winter beans are thought to be significantly lower and it is generally thought that crop areas are lower in general. All of which leaves the trade wondering even more than normal, what the likely supply and demand situation will be.
Crop areas sown in the Baltic region are believed to be good and in generally good condition and the faba bean crop planted in Australia, while slightly down in area (growers switching to chickpeas) is also in good early condition. All of which paints a picture of likely strong competition in the markets post-harvest and probable further downward pressure on values.

UK Pulses

Feed Beans
The forecast supply varies significantly, depending upon the market view ranging between just over 400,000 tonnes to exceeding 550,000 tonnes. The truth is these are simply best educated guesses. Current values are running at around £300/t ex farm, should anyone have any to sell, but the new crop is currently trading on a premium over November wheat futures of around £45 to £50/t (around £245/t ex farm). This is a significantly increased premium over the more traditional levels of £30- £35/t at this time of year, which reflects the continued interest in domestic protein production. Whether it is driven by genuine demand or supply uncertainty is yet to be seen and the real interest levels remain low, indicating that continued prices at these levels may be optimistic.
 
Export beans for human consumption
There is almost no activity in this market at present and suggestions of premiums remain non-existent.
Bruchid beetle damage was a hot topic until recent years but with improved capabilities in cleaning in both domestic and destination markets, this issue is now less considered in preference to good colour, when electing lots suitable to offer these markets. Competition from Australian sources for quality and Baltic origin for price remains very high.

UK combining peas
Again market interest is low. Ex farm offers for any type of pea are almost non-existent and buyers seeking product are minimal too. Focus is now firmly on the likely out turn of the current crop and upon contracting for crop 2025.  With growers having had a variable experience at best over the last 2 harvests man appear to be holding off commitments to 2025 crop until they have seen the outcome of this years efforts.

Green peas
Micronisers remain keen to obtain nicely coloured good quality samples with any with less than 10%  waste and stain paying around £350/ t ex farm.  New crop is keenly awaited, but the earliest harvest is not expected for another 5 weeks or so.
Contracts for crop 2025 are offered on a negotiated ex farm basis of £300/t minimum to £400 maximum basis or alternatively on fixed prices with bonus options at values in between.

Marrowfat peas
Anyone holding marrowfat peas in the open market is likely to receive offers of around £500/t but as harvest approaches, offers may fall a little, depending upon perceived likely availability from new crop.
Contracts for Marrowfat pea and Green pea production for crop 2025 are now available with no fixed prices yet available for yellow or maple peas.

Yellow peas
This niche is constantly under pressure from imports at very low values from eastern Europe and there appear to be no domestic stocks available ex farm for immediate trade.
This sector is something of a conundrum as interest remains good but demand poor. The growing alternative protein market uses yellow pea isolate but is distorted by cheap exports from China, effectively dumping it as a biproduct of starch extraction used in noodle production. This has caused trade disputes in the USA and it remains to be seen how Europe will react.
Contracts will be available for 2025 crop but at a low level and those interested now, should contact their merchant directly.

Maple peas
The story continues with demand in recent months stripping the available supplies, which had already fallen to a low following prolonged lack of interest from buyers.
Stocks now non-existent will be replenished at a low level at harvest, but the situation is unlikely to change much as contracting for 2024 was at a low level, reflecting buyer interest at the time.
Crop 2025 contracts are likely to be released it the coming weeks are likely to top £400/t ex farm. Contact your merchant if interested at this stage.