GrainSource Pulse Market Report – February

Executive Summary

• February pulse markets have shifted from price discovery to reduced participation, with behaviour having a larger impact on trade flow than outright price moves.

  
  

• With nearby export programs largely completed and vessels cleared, urgency has dropped out, and buyers are no longer forced to execute.

  
  

• Export participation across fabas, lentils, and chickpeas has become more selective and timing-driven, with enquiry levels remaining visible but conversion into firm business lower.

  
  

• Domestic buyers are largely covered, and softer prices alone have not been enough to draw demand back in, limiting downside momentum but slowing volume.

  
  

• A stronger AUD has added further pressure to export-linked bids, reinforcing a quieter, slower market where liquidity is thinner and execution requires clearer alignment.

  
  

• In this environment, holding decisions are less about price views and more about cashflow timing, storage costs, quality risk, and market depth.

February pulse markets have transitioned from execution-driven trade to a more selective, timing-led environment.

With nearby export programs largely completed and domestic coverage in place, behaviour has shifted more than prices.

This change in participation has shaped trade flow across all pulse commodities.

Export Market: Coverage Done, Engagement Reduced

Prompt export demand for pulses is largely complete. With vessels either departed or clearing, buyers are no longer managing replacement risk or execution pressure in the nearby window.

What has followed is not a push into forward accumulation, but a step back from the market.

Across fabas, lentils, and chickpeas, enquiry levels remain visible, but the rate of conversion into firm business has fallen sharply. Buyers are asking questions, but fewer are committing unless value is clearly compelling or timing aligns very cleanly.

Rather than staying engaged or rolling coverage forward, many buyers appear comfortable making opportunistic purchases and otherwise sitting on existing bids.

This marks a clear shift from earlier in the season, where execution requirements forced buyer participation even at uncomfortable levels.

Current bid interest is heavily weighted toward April–May shipment across all three pulses, with limited prompt coverage and only selective interest further forward. Later shipment interest should not be interpreted as an expectation of stronger bidding.

Commodity Observations

Faba Beans

The nearby export demand for faba beans has dropped away quickly following the completion of prompt programs.

As forecast, export bids are now sitting around $425mt for #2 grade in southern ports, but these bids are largely for April–June shipment, rather than prompt execution.

At those levels, seller engagement has narrowed and softer interest has failed to generate additional volume.

The timing of these bids is important. Egypt’s domestic faba bean harvest begins in April, meaning Australian shipments executed now are likely to arrive as competing domestic Egyptian fabas are coming onto the market.

That overlap reduces importer urgency and also limits willingness to commit to volume.

With export programs already covered and no replacement risk, forward demand remains thin and conditional, leaving the faba bean market range-bound.

Lentils

Lentil markets are currently being constrained more by timing and competing supply than by outright price.

Export bids are skewed toward later shipment windows, and while values have softened, this has not translated into increased activity. Lentil growers have shown little willingness to meet softer bids, keeping bid–offer spreads wide and limiting execution.

Buyer participation remains selective, with limited appetite to extend coverage without a clear timing advantage.

The presence of Canadian lentil supply across similar shipment periods continues to influence export markets, reducing pressure on buyers to secure Australian tonnes.

As a result, lower prices alone have not been sufficient to stimulate demand, and forward trade remains thin.

Chickpeas

Chickpea markets are showing mixed signals.

Prices firmed into January, supported by constrained near-term export availability as prompt programs wound down and competition between bulk and container demand.

However, that price strength has not translated into sustained trade flow. Export participation has become increasingly destination- and timing-specific.

With India’s tariff on Australian chickpeas reinstated (at around 10 %) and domestic supply set to lift through the rabi harvest, import demand remains conditional, limiting confidence around large-scale re-entry.

While chickpeas can firm on limited liquidity early in the season, once prompt coverage is complete and tariff- and timing-related risk is priced in, bid depth falls away quickly.

Domestic Pulse Market: Coverage Comfortable, Demand Static

Domestic pulse uptake has slowed materially.

Earlier coverage has left buyers adequately positioned, and lower prices have not been enough to draw them back in.

This lack of domestic response to price softness reinforces the broader theme of the month: behaviour is being driven by coverage and timing, not value.

Without a need to act, buyers are choosing not to.

The domestic market, which often provides a backstop during export slowdowns, is currently offering limited support.

Liquidity and Trade Flow

The most noticeable change in February has been a thinning of liquidity rather than a collapse in price.

Bid–offer spreads have widened across pulse markets, not because sellers are unwilling to move, but because buyers are less motivated to engage.

Rather than forcing volume through lower nearby prices or stretching forward positions, many participants are stepping aside.

This has resulted in fewer executable bids, longer negotiation cycles, reduced follow-through on enquiries, and increased selectivity around parcel size and timing.

Trade is occurring, but it is slower, more deliberate, and less forgiving of misalignment.

Why Trade Feels Harder Despite Modest Price Moves

A consistent theme through February has been that pulse trades feel harder to complete, even though headline prices have not moved dramatically.

When buyers are not compelled to act, they can afford to be selective, and markets slow as a result.

Growers who had a low inclination to sell into bids throughout December and January, do not show any indication that they are more willing to meet the market now.

Agreement now requires clearer alignment on timing and value than earlier in the season, and fewer participants are willing to compromise.

While frustrating on the ground, this is consistent with a market transitioning from execution-driven to discretionary.

In Which Direction Should Growers Go Now?

With pulse markets quieter and buyers showing little urgency, decisions are less about chasing price and more about weighing the real costs and risks of waiting.

For growers holding pulses, the key question is not simply where prices might go, but what it costs — financially and commercially — to hold grain over time.

Storage costs vary depending on where grain is held. On-farm storage avoids direct storage fees, but grain held is still capital tied up and cashflow delayed.

For grain stored at local sites, ongoing storage charges, along with inturn and outturn costs, accumulate quickly and need to be weighed against any potential price improvement.

Regardless of storage type, time has a cost.

Even where storage itself is effectively “free”, holding grain pushes cash receipts further out. In a slow market, the cost of waiting can easily outweigh modest price gains, particularly once interest and operating requirements are considered.

Quality risk also increases with time - especially for pulses. Unlike cereals, pulses do not store indefinitely without consequence.

Extended holding periods increase the risk of discolouration, handling damage, or other deterioration, which can reduce buyer interest or narrow the range of markets available.

Grain that meets buyer preference today may be harder to place several months forward.

Liquidity matters more in quieter markets.

When buyers are selective and prepared to sit back, the ability to move grain cleanly becomes important. Thinner liquidity means exits take longer, and timing mistakes are harder to reverse.

This doesn’t mean selling grain indiscriminately. It does mean holding should be a deliberate decision.

Weighing storage costs (where applicable), delayed cashflow, quality risk, and market liquidity against realistic upside is critical in the current environment.

Holding Pulses Requires More Than a Higher Price

When storing pulses, it’s not enough for prices to simply improve over time.

To match the value of a bid available today, prices often need to rise by several steps, not just one.

One of those steps is market destination.

Pulses held for longer are more likely to be sold into alternative or lower-spec markets - most likely the domestic feed markets, which typically trade below export-quality bids. That means the starting point for a future sale may already be lower than the price on offer today.

Beyond destination effects, holding pulses introduces real costs that must be recovered.

These include storage charges (where applicable) and freight into storage. Even with on-farm storage, the cost of tying up grain and delaying cashflow still needs to be justified.

For holding to make sense, the future price must not only recover these costs, but also deliver a clear improvement over today’s bid.

Simply matching the current price at a later date results in a worse net outcome once costs are accounted for.

In practical terms, holding pulses only works if the market can realistically move enough to overcome lower market pricing, cover storage and freight into site, and still improve the net return.

If those steps aren’t achievable, selling earlier into current demand often preserves more value than waiting for a higher headline price that doesn’t fully compensate for the costs, risks, and time involved.

AUD/USD and pulse bids

It is necessary to mention that over the past six weeks the AUD has strengthened materially against the USD, and that has mechanically weighed on export-linked pulse bids.

Pulse export markets are traded in USD, so when the AUD lifts, the same USD sale price converts back into fewer Australian dollars, softening bids even if offshore demand hasn’t changed.

This effect became more pronounced in late January and early February when the AUD pushed above ~US$0.70, including a sharp move higher around the early-February RBA decision.

A move of around 4% in the currency cannot be absorbed by exporters alone, meaning part of the recent price softening reflects this adjustment being passed back through bids.

A softer AUD could provide some support to bids, although historically currency-driven rallies tend to be less pronounced than the initial fall.

Summary

February has not been about pulse prices finding a new level.

While values have eased in places, the more important change has been in behaviour.

With export programs largely covered and domestic buyers comfortable, urgency has dropped out of the market and many buyers are content to sit back and wait.

The result is a pulse market that is quieter, slower, and more selective than headline prices alone would suggest.

For sellers in a slow pulse market, any decision to hold should be less about price views and more about cashflow timing, storage costs, and quality risk over time.