Canadian Area Shifts From Grains, Canola

VANCOUVER - Apr 24/14 - SNS -- This year's seeding intentions estimates for Canada offered an unexpected look into the thinking of farmers, with less enthusiasm shown for lentils and more for peas than most market participants thought would be the case.

Farmers intend to boost land in lentils 20% and peas 21%. Markets thought the lentil area increase would be closer to 30% and peas closer to 10%. It is important to recall that seeding intentions are not the same as seeded area. Seeding intentions are a message from farmers to the market. Actual area reflects the market's response.

This becomes obvious from the historical relationship between seeding intentions and actual seeded area. With rare exceptions, the two numbers are never the same. During the previous three years, the final lentil seeded area averaged 4% higher than the intentions and peas 1% lower. The actual difference ranged from 5% lower to 16% higher for lentils; and 11% lower to 13% higher for peas.

Though farmers failed to validate market thinking about lentil and pea area, total land in pulses and specialty crops is not far from expectations. At a prospective 8.078 million acres, this could be the second highest area sown to crops in this sector since topping 8.6 million in 2010.

Last year, Canadian farmers planted 6.744 million acres of pulses and special crops. An exceptional combination of heat and moisture pushed yields to their highest levels in history resulting in a record 6.443 million metric ton (MT) harvest. If yields drop back to their recent five-year average, combined production of all crops in this sector would be expected to slip to 6.389 million MT, for the second largest crop in history.

Seeding intentions reveal a fundamental shift in emphasis this year. Farmers are reducing land in grains and canola in favor of soybeans, pulses and special crops.

Land in all crops is expected to rise from 72.7 to 72.92 million acres. Intentional summerfallow will slip from 3.875 to 3.37 million acres. Soybean area will jump from 4.52 to 5.26 million acres, including 300,000 in Saskatchewan and 1.3 million in Manitoba. Last year, farmers in Saskatchewan planted 170,000 acres of soybeans, while Manitoba grew 1.05 million.

Ignoring soybeans, pulses and special crops, reveals farmers intend to reduce land in grains and other oilseeds from 61.44 to 59.58 million acres this spring.