Some comments on the April 21 seeding intention report.
First number is acres, second number is the % expected to be carried out from the 2016 new crop.
Commodity Last Estimate Published today Current Grower Bids
Large Green Lentils: 1,030,000 (14%) 1,056,000 (11.9%) O/C 75 cents N/C 43 cents
Small Green Lentils 313,000 (29.3%) 324,000 (15.9%) O/C 62 cents N/C 38 cents
Red Lentils 3,586,000 (17.9%) 3,692,000 (16.2%) O/C 54 cents N/C 36 cents
Green Peas 548,800 (29.3%) 582,000 (31.3%) O/C 10 bushel N/C 9.50 bushel
Yel Peas 3,429,900 (11.5%) 3,642,100 (14.3%) O/C 13 bushel N/C 9.50 bushel
Chickpeas 132,000 (3.7%) 112,000 (0%) O/C 50 cents N/C 40 cents
Canary 315,000 (18.1%) 315,000 (16.2%) O/C 25 cents N/C 25 cents
You can see there is no dramatic change from previous expectations. The government is forecasting acres to be slightly higher, and demand to be slightly more than previously expected. Some rain is expected for the drier regions next week. Farmers will also start seeding next week as conditions allow.
The main factor (as always) will be India. There are reports that their current pulse stocks will last less than 3 months. Shelves will be completely empty when Canada harvests in August and it will take several months to re-fill the pipeline. Good News for big red lentils and yellow peas. Also, Iran is now able to directly influence the large green market as their sanctions are removed. 2015 crop carryout will be virtually zero for most commodities.
As of this moment, conditions are looking steady through November 2016. The market has been pricing in a good sized crop from Canada, and the current report does not change that. Through 2016, price shocks to the market will tend to be to the up-side if poor growing conditions occur. Otherwise, prices should drift around current levels. There are rumours about some short positions in the market, but my feeling is that the risk to sell short is more to fill additional processing capacity rather than counting on a big win from grower prices crashing. The main reason for this is: Companies will have to compete hard for new grower product. Most growers have 25% of their expected pulse production contracted into markets with strong initial demand with zero carry-in stocks. Forecasted carry-out percentages for the 2016 crop are not burdensome. Even with good yields, growers will remain in control of marketing in the foreseeable future, It will take several months after harvest before growers significantly change pricing expectations. Slow and steady should remain a good strategy.