March 2016

March 2016

stubble-soil-moisture-map-11012015

I have been thinking about a Feb 19, 2016 Les Henry article in grainnews.ca that featured the November 2015 post harvest stubble moisture map (above) and how the unusual weather warm weather and limited snowfall this winter will lead us into the 2016 crop year.

Farmers, especially in the South West and South central near the USA border are openly talking about the lack of subsoil moisture.  Unless there is some meaningful precipitation before April 2016 we will see many farmers need to change their seeding decisions.

The map serves as a valuable jumping off point.  Since November a large portion of the growing area has seen limited precipitation and above normal temperatures and the trend seems to be holding.   While we are a long way from losing the crop to drought.   Current conditions highlight the vulnerability of several important areas for Lentils and Peas.

If current dryness continue through April,  the subsoil map turn from yellow to red and from green areas to yellow at seeding time.   In some areas, we are already there.   A large percentage of the lentil, pea, and canary crop will be seeding into distressed conditions.   World Weather forecasts rainfall to be limited on the prairies until June 2016.  Without adequate subsoil moisture and no carry over, these conditions will undoubtably take us back to a situation of increased market risk and volatility.

February 2016

February 2016.

Please find a quick summary and comments about Agri-Food Canada’s Special Crops Outlook published February 16, 2016.

PEAS – Canada expects to increase pea acres by 14% in 2016.   The increase will be solely in yellow peas and will be welcome to replenish stocks that are expected to be near zero prior to harvest.   Green Peas remain a disappointment with 2 years of stocks largely sitting on farms with no buyers despite being 40% cheaper than yellow peas and 75% cheaper than lentils.   Expect the upcoming year to see more balanced supplies and traditional pricing between the two varieties.

LENTILS – RED – Red acres are also expected to increase by 14% in the spring.   The planting will offer the potential to set new production highs in Canada.   Weather will play a major factor in determining future prices.  With zero carry-out of the 2015 crop, potentially 4.5 million acres, and a yields range that could make available between 2 and 4 million MT.  Expect continued volatility.

LENTILS – GREEN – Less ambiguity associated with this one because of smaller grower / seeding range, less foreign competition, steady markets.   We will sell out the 2015 crop and there will be an empty pipeline to kick off the 2016 harvest.  Subsequently, markets have been strong and steady unlike their red counterparts.   While prices keep pushing the top end of the range, it is unlikely that we will see dramatic downward movement.  However, in the case of crop troubles, we could see prices quickly move upwards again to 2015 levels.

CANARY – Farmers have a decent amount in the bin and they will grow similar amounts in 2016.   The market will have difficulty taking off because of general softer trend in other grains and lassie faire demand.   It would take weather issues in Canada to jump start any real upward movement in this commodity.   Given the volatility and price pressure on other special crops, a slow and steady canary seed could be considered a welcome relief.