The guessing game is over.
Pulse crop traders have been publicly prognosticating on the size of the coming crop since January and scribbling down numbers in private long before that.
They have conducted producer surveys and talked to elevator agents, trying to get a bead on what farmers are going to put in the ground come spring.
Now they know.
Data from Statistics Canada’s extensive survey of 12,200 farmers was released last week and according to people in the trade it’s what they expected all along.
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“I couldn’t have thought of something more dull, really,” said David Newman, a trader with Berdex Canada Ltd.
“A few people thought it would be a little bit more, a few people thought it would be a little bit less, but really I thought it was pretty much on the mark.”
Others shared that assessment, saying the agency’s forecast of a 15 percent decline in lentils, a 33 percent drop in beans and no change in pea acreage was exactly what they thought farmers were going to do.
That may have been their mindset in April, but it sure wasn’t back in January at Crop Production Week or in March at the Canadian Special Crops Association’s annual meeting in Cancun, Mexico.
Featured speakers at those two events called for a 10 percent increase in lentils, a much smaller decline in beans and pea forecasts that ranged from an eight percent increase to a 15 percent drop in acreage.
But some of those predictions were met with skepticism at the time. Agricore United special crops trader Martin Chidwick cast considerable doubt on the expectation of a 10 percent rise in lentil acreage at the Cancun meeting.
That’s why Statistics Canada
didn’t surprise him with a prediction of 1.25 million acres of lentils in Saskatchewan, but he figures others in the trade must have been.
“Some of the activity of the guys on new crop would suggest that they were expecting a much bigger number, because we are going to have a totally empty pipeline and here we have people shorting the farmer a 12-cent spread,” Chidwick said.
Given Statistics Canada’s overall lentil number, he expects to see 650,000 acres of Lairds this spring. That is the most important number to keep in mind when assessing the lentil crop, because Lairds are the only variety where Canada has the ability to dictate good prices. Chidwick and his fellow traders would normally “pencil in” somewhere around 800,000 acres of that variety.
The rest of the lentil breakdown will go something like this – 230,000 acres of small-seeded varieties, 130,000 acres of mediums and 240,000 acres of crimsons, French greens and other varieties.
Chidwick said overall supplies are going to be tight.
“It’s going to be interesting, but holy smokes we’re going to be empty.”
While his gut feeling about lentils appears to have been accurate, the pea forecast he delivered in Cancun on behalf of an AU colleague, calling for a 15 percent decline in Canada’s largest pulse crop, looks to have been way off the mark.
Eric Fossay prepared that forecast after collecting feedback from AU elevator managers across Western Canada. But he points out that it was done before nitrogen prices started to rise and soil moisture conditions began to improve.
Even when those factors are taken into account, Statistics Canada’s pea number of 3.2 million acres was “a little bit higher than we expected,” Fossay said. Industry estimates ranged from 2.8 to three million acres.
Brigitte Sabourin of Roy Legumex Inc. said a 33 percent decline in Manitoba’s bean acreage “may be overstated.”
She said processors have come out with an attractive navy bean program in the last couple of weeks in response to increased demand from major canners in England, who are looking for a stable supply of navy beans from Canada for the next few years.
“That might have encouraged farmers to put acres back into beans, especially into navy beans.”
There was no chickpea estimate in Statistics Canada’s March intentions report, but Fossay anticipates the crop could be half the size of the one planted in 2002.
He said kabulis have been plagued by disease and traders were unable to find premium markets for last year’s desis because India and Bangladesh have been filling traditional demand for that type of chickpea with yellow peas.
Newman expects no more than 310,000 acres of chickpeas to be seeded, down 43 percent from last year’s crop of 545,000 acres. Other analysts are calling for a smaller 26 percent decline.
