Grain Snippet: Lentils-Comfortable Stocks, Uncomfortable Weather
Old-crop lentil prices have continued to drift lower, despite a recent pullback in the Australian dollar and limited grower selling liquidity. The seasonal strength seen through April and May has faded, and old-crop bids are now converging with new-crop indications, which are sitting around $650–655/mt delivered Adelaide or Melbourne. In contrast to recent seasons that saw prices in the $800-$1000/mt range, the market is in a much more comfortable supply position. The market is now trying to work out whether demand can keep absorbing that supply quickly enough to prevent values from grinding lower.
So far in 2026, demand has been better than expected. Australian lentil exports have run at exceptional levels through the first half of the shipping year, helped by lower relative prices and earlier concerns that India could adjust import duties. Thankfully, trade chatter around the possible reimposition of Indian import duties has also wound down. There are also concerns over the potential impact of El Niño on the southwest monsoon and Indian domestic pulse production.
The outlook for the Canadian and Australian lentil crops in 2026/27 is keeping a lid on prices at this stage. ABARES now forecasts Australian lentil production at a record 2.2MMT, up 3% y/y and more than double the 10-year average as growers have dramatically increased planted area in recent years. The larger crop reflects expanded planted area in recent years and a much better seasonal start than last year, although growers remain alert to the potential for a warmer and drier spring under El Niño. Nevertheless, at this stage, the outlook gives Australia another large exportable surplus, even before accounting for old-crop carry-in.
Canada remains the other weight in the balance sheet. Production is still sitting in the 2.2–2.4MMT range. That would be down sharply from last year’s record crop, but total supply is still forecast at 3.84MMT, with carry-out stocks at 1.24MMT and a stocks-to-use ratio of 48%. Saskatchewan is the key province to watch, accounting for almost 90% of Canadian lentil area. Saskatchewan lentil seeding was 76% complete in the latest crop report, well behind normal pace. That delay does not necessitate a drop in yield at this stage, but it evidently shortens the effective growing window.
There is, however, a meaningful difference between red and green lentils. Green lentil stocks are the heavier problem, with estimates pointing to around 850,000MT of carry-out and close to a full year’s use on hand. Red lentil carry-out is still large at around 630,000MT, but the stocks-to-use ratio is closer to 35–40%. Reds are not short, but they are less burdensome than greens, and last year’s swing toward greens is unlikely to be repeated if red values continue to hold relative price strength.
India remains the main demand-side weather risk. The latest monsoon forecast has June–September rainfall at 90% of the long-period average, with below-normal rainfall anticipated across central and south peninsular India and the monsoon core zone. These areas are important for rainfed kharif pulses, including pigeon peas. If rainfall totals are poor, or distribution is uneven through establishment and flowering, pigeon pea yield risk would rise, tightening India’s broader pulse balance and supporting substitution demand for lentils.
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