Lentils: Looking for the lows
Lentil prices have been under pressure
but should soon be close to their harvest
lows. In fact, Lairds are normally up ticking
by now because their typical seasonal
tendency has already turned positive, but
Crimsons tend to be later.
Both have underlying support zones that
should provide underpinnings, and prices
probably will not test the low sides. When
Lentils are in a bull mode, the Long Term
Chart indicates that pullbacks tend to be
minor and short-lived.
As well, while uptrend lines have been
drawn, Lentils tend to have relatively short
term trends that rarely extend into the next
marketing year, although major long term
directional thrusts can run for years. Thus,
short term confidence should be on the
support levels, not on the existing trends.
Finally, the Value Ratio indicates that
Crimsons are attractively priced compared
to Canola for farmers wanting to sell crops
that are Dear while holding Bargains for
future recovery. This could encourage
heavier Crimson sales this autumn thereby
slowing their initial pace of price recovery,
more like the 15 Year Average than the 5
Year.
The long term outlook continues to look
very good. Lentil prices should be much
higher in January.
August 27, 2020
Chart analysis and commentary by Harold AGJ Davis