Grain Snippet: Lentils Consolidate
The global lentil market is entering the 2026/27 season with historically large supply levels, but also with a potential increase of weather risks to new season production.
Record production across Canada and Australia during 2025/26 has resulted in high carry-out stocks, particularly in Canada, where total lentil supply approached 4.0MMT and ending stocks were forecast above 1.26MMT. Canada’s March disposition data indicated roughly 2.4MMT of lentil supplies left on hand, 2 MMT of which remain held on farm – the largest volume on record for this point in the season. The total Canadian carry-out forecast remains significantly above last year’s level (up 122% y/y). Canada’s stocks-to-use ratio is projected near 46%, reflecting one of the loosest balance sheets in recent history. Large stocks of yellow peas in both Canada and Russia have also continued to weigh on the broader pulse complex.
Despite these burdensome supplies, lentil prices have remained relatively resilient through 2026. Australian old-crop bids have recovered from harvest lows and returning to $680-700/MT, supported by tightening Australian stocks and low grower liquidity. Australia exported approximately 1MMT of lentils during the Oct–Feb period alone, an outright record for that stage of the shipping season, with the majority exported from SA. The strong pace is a reflection of growers’ cash flow requirements after the poor 24/25 season and subsequent increased early selling liquidity, coupled with earlier concerns of India raising the lentil import duty.
Following India’s domestic lentil harvest (circa 1.75MMT), and the large volume of early-season imports, appetite is now showing signs of weakening. This could indicate that the high export pace for Aussie lentils may not be maintained through the balance of 2026. Ongoing demand will increasingly be determined by the 26/27 season outlook, weighed against availability of old crop supply.
Attention is shifting toward the possibility of a significant El Niño event during the second half of 2026. Current models indicate the potential for a strong ENSO phase during Jul–Oct, raising concerns around Indian monsoonal rainfall and global pulse production. India’s pulse balance is highly dependent on pigeon pea production, which is strongly influenced by monsoonal conditions during the Kharif growing season.
Weak or poorly distributed monsoonal rainfall has historically reduced pigeon pea yields and increased India’s reliance on imported pulses, including lentils. Periods of pigeon pea deficits have often coincided with stronger Indian lentil imports and firmer global pricing.
Australian lentil growing regions have started 26/27 much earlier than last year, amid decent soil moisture conditions. However, they remain exposed to warmer and drier spring conditions if El Niño intensifies. In Canada, seeding is off to a slow start, but total area is expected to remain relatively stable y/y; production is forecast lower y/y under more normalised yield assumptions following the exceptionally strong 2025/26 season.
Beyond supply fundamentals, the currency is working against lentil prices as the Aussie dollar continues to firm. In recent months, it has broken above the 72c resistance, creating downside pressure in AUD terms even if international lentil values remain relatively stable.
Overall, the market remains weighed down by historically large global stocks, but weather-related production risks, particularly in India, are becoming increasingly influential in shaping expectations for 2026/27.
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