Canada Markets

Trends in the CME soybean futures will play an increasing role on Prairie farms this year. Soybean production in Saskatchewan was most recently promoted as a cropping option during a series of Saskatchewan Pulse Growers meetings held across the province, while limitations on the shorter-season varieties may be the limiting factor for growth in soybean acres on the Prairies.

While soybeans have been grown for more than a decade in Saskatchewan on limited acres, the sharp rise in recent years shows the crop is gaining acceptance. Saskatchewan Agriculture's Trade Update -- 2011 Year in Review publication shows a shipped volume of 1000 metric tonnes in 2008, 9000 mt in 2009, 15,000 mt in 2010 and 140,000 mt in 2011.

The growth in production in the West, along with the insatiable demand from China, has also led to the development of new marketing channels in the West with increased movement of product through Vancouver ports on the West Coast. A few short years ago, this would be unheard of. Last year, 148,000 mt moved through Vancouver, while 325,300 mt has been shipped in the three months between October and December of 2012, with potential for this volume to grow during the balance of the crop year.

The movement of soybean production north (and west) has largely been a result of the introduction of shorter-season varieties. Lower input costs are also attractive, with Manitoba Agriculture's crop production cost guidelines for western Manitoba showing total operating costs for conventional soybeans to be $145.96/acre, as compared to Invigor canola at $237.58/acre. The largest savings are in fertilizer, at $75.75/acre, and fungicide, at $30.60/ac.

While there are risks involved with growing the crop in northern climates because of their longer growing season, advocates are pleased with the relative ease in growing the crop and its performance compared to canola. While yields are suggested to be 25 to 35 bu./acre in Saskatchewan, as suggested by one seed company, a longer-term average of 28 bu./acre is said to be realistic. When one compares that to Saskatchewan's estimated canola yield of 24.6 bu./ac for the 2012 crop and the higher input costs required to grow canola, soybeans look even more attractive.

The latest Agriculture Canada Outlook for Principal Field Crops is forecasting a 15.5% increase in soybean production for the 2013/14 crop year, an increase of 642,000 acres to a total acreage of 4.8 million acres. Ontario, by far the largest producer in the country, as seen by the green shaded area on the attached chart, seeded 62.4% of the country's 4.2 million acres planted in 2012. Ontario harvested a record crop of 3.3 mmt of the country's 4.9 mmt total production. Given prices received this year, Ontario will plant more.

Manitoba seeded roughly 800,000 acres in 2012, as shown by the red area on the attached chart, and produced 759,300 mt, representing 15.5% of the national total. Trade estimates have Manitoba potentially expanding acres as much as 200,000 to 300,000 acres.

Quebec produced 825,000 mt or 16.8% of the national total, on 692,000 acres, as shown by the blue area on the attached chart. Quebec's seeded acreage has not trended as sharply as in other provinces; in fact, it fell lower in 2012 than the previous year.

Saskatchewan statistics have not been generated by Statistics Canada, although 2012's acreage has been estimated to be 75,000 to 100,000 acres, while estimates see this growing to 150,000 to 200,000 acres in 2013, while the south-east corner of Alberta will also see some acres.

Cliff Jamieson can be reached at cliff.jamieson@telventdtn.com

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