Flat demand for Canadian sunflower seed, along with tight supplies and reluctant sellers, are keeping western Canadian sunflower bids within a narrow range, according to industry participants.
“It’s kind of at a stalemate to a certain degree for prices despite what little sunflower is out there,” said Roger Kissick, sunflower analyst with Linear Grain.
Grant Fehr, of Keystone Grain, said the slow North American birdseed market this winter, along with soft demand in Europe, Africa, and the Middle East, due to the large sunflower crops in Eastern Europe, have weighed on sunflower cash bids.
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Short-term demand for Canadian sunflower will continue to be slow. Argentina’s harvest is expected to start in three weeks, which will weigh on prices, and advance the global supply, Fehr said.
However, despite the weak demand, prices have managed to hold steady. Restricted supply, along with reluctant sellers, have been supportive towards values, Kissick said.
With tight supply and reluctant sellers keeping sunflower cash bids solid, drought concerns in Argentina could advance prices later in the year, Fehr said.
The potential for new export business in the emerging Pacific Rim markets, including China, was also seen adding to the firmness in Canadian sunflower values.
As sunflower producers look for new export business, total Canadian area is expected to increase. Farmers are expected to plant around 90,000 acres in the spring of 2012, said Claire Kincaid, agronomist with the National Sunflower Association of Canada. That’s more than double last year’s 42,000 acres that were seeded across Canada, she said.
Kissick said that if the dry weather seen so far this winter continues into the spring, the area seeded to sunflowers would increase even more, given that sunflowers were more resistant to dry conditions than alternative crops.
Confectionery sunflower seed varieties make up roughly 75 per cent of Canada’s sunflower production, while the oilseed varieties account for 25 per cent.
The oil sunflower seed types have been bringing 33 cents per pound in the spot market, while confectionery sunflowers have been bringing 30 cents per pound, according to Prairie Ag Hotwire data.
