The durum crop looks gargantuan.
Barley: monstrous.
And peas and canaryseed seem like two titanic twins headed for an iceberg.
Halloween came half a year early to grain markets this week in the guise of Statistics Canada’s seeding intentions survey.
The report spooked many in the trade. Analysts say the report paints a very scary scene for farmers.
As expected, farmers looked at depressed wheat prices and tried to find other crops to grow. But the trade is surprised by some of their choices:
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- Farmers plan to seed more canola and flax, but not as much as the trade expected.
- They haven’t cut barley, a crop that has not been providing excellent returns.
- They are cooking up another record pea crop in a year when supplies are adequate and prices unattractive.
- In Saskatchewan, farmers say they will plant 400,000 acres of canaryseed, up 60 percent.
Perhaps the largest shock came in the durum projections. Traders figured farmers would grow about 10 percent more durum than last year.
But farmers told Statistics Canada they intend to plant the biggest crop ever, beating out the 6.5 million acres grown in 1989.
“Durum is hu-u-u-uge, and I sure hope this sends a message out to producers,” said Mike Jubinville, analyst with Pro Farmer Canada.
For the past several years, durum has sold at a premium to bread wheats.
“The durum market has a precedent for doing well in the last few years, and I think that growers are grasping at that as a market that could do it again,” said Dulcie Price, grain marketing consultant with Optimum Agra.
Farmers around the world have picked up on the trend and are growing more durum, pushing down world prices, explained Price.
The Canadian Wheat Board’s latest pool return outlook, released April 23, shows durum premiums eroding.
Derek Sliworsky, a board official who crunches numbers for the outlook, wouldn’t comment on whether the board anticipated the large increase in durum.
“Some of them (the planting intentions) were somewhat surprising, and I don’t really want to say which ones,” said Sliworsky.
He noted Canada is the world’s largest durum exporter.
“Considering that it (durum seeding intentions) is a record, and it’s a record by quite a bit, that is fairly bearish for durum markets right now,” said Sliworsky.
“Depending on what yield is going to be, it could be very tough slugging for durum.”
Barring production problems, Jubinville said 7.1 million acres of durum could erase the traditional premium it carries over wheat, or even push prices to discounted levels.
