Its been a while since my last posting. We have been really busy along with everyone else in the industry. Our facilities are booked through July with our current production and have started to see a lot of buyers interested in securing new crop shipping for September – December.
Strong demand for these months from India has production capacity filling up quickly.
Big acres are likely on their way. 10%-20% acreage increases are being discussed on lentils and peas. However, trade speculation on potential yields will prove much more challenging. Traditionally markets could count on a yield range of 15-25/bu acre. With the introduction of new varieties the potential yield range has broadened between 15-45 bu /acre with much of the quantity/quality potential being highly influenced by the weather over a short period of time.
The laws of big numbers need to start being considered when each 5/bu yield gain or loss = an 400,000 MT change in production over 3 million lentil acres. Lentil exports are forecast to be 1.5M mt in 2014-15. Each 5Bu gain or loss in average yield accounts for a 27% of Canada’s production/export ratio.
It is not surprising that forecasting with only acreage information is usually fruitless.