Mustard is one of the few crops in Western Canada where old- and new-crop bids are currently on par with each other and even stronger in some cases, as prices stay firm in an effort to make sure enough acres are planted this spring.
While new-crop canola is currently trading at a considerable discount to the spot market, the fact that new-crop mustard prices are equal to current bids indicates values will need to remain at reasonable levels to maintain acres, said Kevin Hursh, executive director of the Saskatchewan Mustard Development Commission.
Mustard prices are historically strong, but other crops are also strong. In addition to canola, solid wheat prices will see that crop sway some interest away from mustard as well, he said.
Both spot and new-crop bids for yellow mustard can currently be found around 40 to 41 cents per pound, with brown mustard at 35 cents per pound, according to Prairie Ag Hotwire data. Spot bids for oriental mustard are lagging to the upside, topping out at about 28 cents per pound.
The mustard market "has found a real stable point right now," said Walter Dyck, general manager for mustard company Olds Products. However, he said, it remains to be seen whether current new-crop contracting prices would be enough to bring in the acres needed for 2013.
"It’s all about the return per acre, and canola is moving into the traditional mustard areas," he said. As a result, Wisconsin-based Olds Products was contracting yellow mustard above spot bids at 43 cents per pound, in order to bring in the acres.
Canadian mustard supplies are currently sufficient to hold into November, "and then we’ll need new crop," said Dyck. He said 350,000 mustard acres would be needed to get through 2014.
In projected returns per acre from Saskatchewan’s agriculture ministry, mustard still pencils out better than canola in the brown soil district of southern Saskatchewan, where most of the mustard is seeded and canola usually sees poorer yields.
Agriculture and Agri-Food Canada now forecasts seeded mustard area in 2013 at 346,000 acres, which would compare with 336,000 the previous year.
Of the total mustard planted, yellow and brown varieties are likely to take some area away from oriental mustard.
"Why would you grow oriental, when the price signal is quite a bit less than the other options?" said Hursh, noting that brown and oriental mustard usually see similar yields.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.