2013/14 Pulse Seeding Intentions to Increase 18%

“In the spring, at the end of the day, you should smell like dirt.” Margaret Atwood, Canadian author I would doubt Atwood ever spent much time sifting dirt through her hands as a grower does, but the quote fits at this time of year. Even if you don’t smell like dirt at the end of the day in today’s environmentally protective tractors, it is tough to beat the smell of a quarter section of fresh seeded land as you are admiring the parallel lines through it. It is April 29 as I write this, and Statistics Canada has released its first estimates of seeding intentions in Canada. However, seeding conditions are weighing more heavily on growers’ minds than what is actually going to go in the ground. Moisture conditions have improved in the driest parts of west-central Saskatchewan over the past month and deteriorated, as it is too wet in the southeast portion of the province. The likelihood of anyone seeding in Saskatchewan before the end of April this year is next to nil. What should be dirt is now mud. Before growers think about seeding, the snow has to stop and we need at least 7-10 days of warm weather with some wind. Before everyone frets too much, the 10-year average seeding for May 13 is 25% and last year, it was only 8% -- and look how that turned out in the end.

Let’s take a look at the pulse acres released April 24 and other factors with some wind. Before everyone frets too much, the 10-year average seeding for May 13 is 25% and last year, it was only 8% -- and look how that turned out in the end.

Let’s take a look at the pulse acres released April 24 and other factors that are affecting supply in the world pulse markets.


Peas:
No one should have been surprised at the pea acreage number at 4 million (M) that was released by StatsCan. The price ratio between wheat/peas was in the same range as 2008 when  peas were seeded on 4 M acres. Three of the last five March seeding intentions have been lower than the final. On average, the March intentions were lower than the final by 95,000 acres. The biggest misses were in 2009/10 when the March numbers were overestimated by 445,000 acres and in 2012/13 when they were underestimated by 420,000 acres. Using the five-year yield average of 36.3 bushels per acre (bu/ac), production could reach 4 M tonnes if the acres hold through seeding.

While 4 M tonnes may seem daunting given the carryout facing all grains and oilseeds come July 3, prices could stay firm for the next 18 months given the recent weather events (frost, snow and hail) in some of India’s best pulse producing states. These states also face the likelihood of an El Niño event this monsoon that will keep the Indian government very wary of pulse supplies in Canada  that are affecting supply in the world pulse markets. as the growing season progresses. A monsoon failure doesn’t always equate to runaway yellow pea prices as witnessed during India’s last monsoon failure in 2009. However, the spike normally occurred before the onset of the monsoon season. Official hail and frost damage from a month ago in pulse crops remains sketchy (due to the current election) and some wires are suggesting 15% food inflation in India because of the damage. Approx. 20-25% of India’s chickpea crop was affected by hail and snow. Between Cyclone Phailin and the freak storms, there is no way India will meet the second advance grain and oilseed targets it made in March.


Lentils:
StatsCan’s preliminary estimate of 2.9 M lentils acres were 17% below the record set in 2010/11 and indicative that lentil acres could still rise given the jump in red lentil prices  over the past four months.

For lentils, four of the last five March seeding intentions have been underestimated, compared to the final, by an average of 276,000 acres. That would put lentil acres closer to 3.1 M this spring. During the first week of January, spot red lentils were 20¢/lb delivered to plants in  Saskatchewan, and large green lentils were 22¢. This week, red lentils jumped to 26¢ delivered, with greens falling behind at 23¢. New crop reds have not accelerated at the same pace but have gained 2.5¢ to 20.5¢ over the past three months. Why? When the United States World Agriculture Board released its Vegetation Health Index map for Turkey on April 15, everyone could see firsthand how severe the winter was on lentil growth in the best lentil growing region of Anatolia. Not only was there a lack of moisture, but it froze during 39 of 73 nights from February 1 to April 14, with the major damage coming March 30, 31, and April 1, when temperatures dipped to -9°C, -8°C, and -5°C respectively. Precipitation from September 1 to April  13 was below the amount received in 2008/09 when Turkey produced only 131,000 tonnes of lentils versus the 10-year average of 432,000. Growers should take two things from the Turkish situation. Firstly, given that red lentils are now more than $12/bu and moisture levels have been replenished in west- central Saskatchewan, expect the  


Chickpeas:
Most analysts (including me) were in the 200,000-acre range for chickpea acreage this year. StatsCan came in with half of that at 100,000 and 80,000 acres less than 2013/14. Growers I spoke with after the release suggested that the lack of moisture and disease concerns were the primary reasons from cutting back on acres in the southwest part of the province. That does not make the Canadian market wildly bullish for the coming growing season. While India’s chickpea crop has been damaged as well, our chickpea market is not large enough to affect this. The U.S. chickpea   
acreage only increased 1% for this growing season. Kabuli- type chickpeas have witnessed a moderate jump in prices over the past 10 days in anticipation of Ramadan shipping in the next few weeks.

The 2012/13 pulse marketing season will be interesting right until July 31 this year with old  crop continuing to drag up new crop as we go forward. Those that keep in tune with weather and production developments in India and Turkey will be rewarded. Until then, I wish I could conjure up some his and hers Eau de Dirt cologne and perfume. I believe there is a
market of 50,000 at this moment that are longing for the fragrance; whether real or synthetic. Have a great seeding season and please be safe.


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Source: saskpulse.com
PULSE MARKET REPORT
MAY 2014