I must start out with a correction regarding last week’s column.
I quoted Canadian Grain Commission export figures to the beginning of February for lentils that implied export movement was exceptionally poor.
I forgot that grain commission figures are for bulk shipments. Lentils move mostly in containers, and so I drew the wrong conclusion. The situation is similar for the pea numbers I quoted in the column.
The most up-to-date numbers for total lentil exports come from Statistics Canada’s Dec. 31 supply and disposition report.
Read Also
China’s grain imports have slumped big-time
China purchased just over 20 million tonnes of wheat, corn, barley and sorghum last year, that is well below the 60 million tonnes purchased in 2021-22.
That report shows lentil exports from Aug. 1 to Dec. 31 at 763,000 tonnes, up from 552,600 tonnes at the same point in the previous crop year. It is a record large movement for that period.
In peas, total movement from August to the end of December was 1.4 million tonnes, up from 1.09 million in the same period the previous year.
So my worries about overwhelming ending stocks in pulses were wrongly placed, at least based on the first five months of the crop year.
With that out of the way, let’s look at the U.S. Department of Agriculture’s crop projections for 2014, which were issued last week.
They showed continuing large production and downward pressure on crop prices.
However, the futures markets did not cave in, indicating that the assumptions are already largely incorporated into current prices. As well, several analysts questioned the USDA’s acreage and ambitious yield forecasts.
Soybean prices have held up better than corn values this year, so an acreage shift away from corn to the oilseed was expected.
The USDA forecasts a soybean seeded area of 79.5 million acres, up from 76.5 million last year. Expected harvested acres are 78.5 million, up from 75.9 million last year.
The corn area is 92 million acres, down from 95.4 million. Harvested acres are 84.6 million, down from 87.7 million.
Some analysts think the USDA low-balled the seeded area forecasts, alleging it did not fully account for the number of acres not seeded last year because of weather problems, which should come back into production this year, and the number of acres that came out of the Conservation Reserve Program.
The USDA stands by its numbers.
On the yield side of the equation, the forecast of a national average of 165.3 bushels per acre of corn, which would be 6.5 bu. higher than in 2013, raised some eyebrows.
The department noted that last year’s yields were trimmed by delayed plantings because of excessive moisture, particularly in the western corn belt, and late summer dryness.
The trend yield projection is based on a model that accounts for planting progress and summer precipitation and temperatures.
The USDA keeps making these high yield forecasts, but reality keeps getting in the way.
The national average yield has not topped 160 bu. an acre since 2009 and has averaged 149.4 over the past five years.
The department expects that its combination of lower acreage and higher yield will produce a crop slightly larger than last year at a shade less than 14 billion bu.
It pegs total supply at a record 15.49 billion bu. It sees total domestic and export use at 13.38 billion bu., leading to 2014-15 year-end stocks at 2.1 billion bu., up 43 percent from the expected 2013-14 carryout.
It sees the season average corn price falling to $3.90, down from $4.50 this year.
You can quibble with the USDA’s numbers, but even if you push up acreage a little and trim yield, in the end the key numbers of total supply and ending stocks change little.
It seems that comfortable stocks and the weakest prices in years are avoidable only if there is a weather disaster in some major production region.
