Canada Markets

India's Ag Ministry released their Second Advance Estimates for 2019-20 grain production on Tuesday, with the first estimates for the country's rabi or winter crop production. The country's foodgrain production is estimated at 291.05 mmt, a record level that is 6.74 million metric tons above the estimate for 2018-19 and 850,000 metric tons above the government's target for 2019-20. If realized, this crop will have bearish implications for a number of crops.

Both rice and wheat production are estimated at record levels. Wheat production is estimated at 106.21 mmt. This compares to the 103.6 mmt produced in 2018-19, the first time the 100 mmt barrier was breached, as well as the government's 2019-20 target at 100.5 mmt. The country's five-year average production is 96.16 mmt, which has led to ideas that India will export wheat in 2019-20.

India's soybean production is estimated at 13.6 mmt, up 2.7% from 2018-19 and 21% higher than the five-year average. Production of rapeseed and mustard is estimated at 9.113 mmt, down 1.5% from 2018-19 and 17.8% higher than the five-year average. The total of the nine oilseeds reported is pegged at 34.2 mmt, up 8.5% from 2018-19 and likely a record level.

India's total pulse production is pegged at 23.02 mmt, almost 1 mmt or 4.3% higher than estimated for 2018-19. This follows a disappointing kharif or summer crop that is estimated at 7.92 mmt, down from the previous estimate of 8.23 mmt released in September, which is the smallest summer crop in four years.

The second advance estimate included winter or rabi pulse production of 15.11 mmt, which is 1.13 mmt higher than the estimate for 2018-19 and 1.94 mmt higher than the five-year average winter crop. While the year-over-year production of several smaller pulses is expected to fall, winter chickpea production is forecast at 11.22 mmt, above the 9.94 mmt produced in 2018-19 and the five-year average of 9 mmt.

Statistics Canada data shows lentil exports to India of 6,432 mt in December, down 41% from the previous month and the smallest monthly imports in 13 months, while crop year exports through December total 186,303 mt, up 63% from the same period last crop year.

Canada also exported 13,722 mt of peas to India in December, up slightly from the previous month. In the August-through-December period, exports to India total 79,870 mt, down 11.3% from the same period in 2018-19.

Increased confidence in the winter crop may weigh on global prices, while DTN forecasts pointed to decent rains in past months leaving the crop in good shape.

Large green lentils delivered to Saskatchewan facilities have fallen slightly from last week to $25.25/cwt, the lowest reported by Statpub.com and Saskatchewan Agriculture since early November. Bids for red lentils have increased slightly since last week to $20.29/cwt, but below the January high of $21.14/cwt.

Yellow pea bids are reported to average $6.75/bushel, unchanged this month but down from the $$6.98/bu. reached in mid-January. Green peas are reported to average at $10.63/bu., down from the $11.93/bu. reached in early January. Peas may also face trade issues linked to China's coronavirus.

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