Canada Markets

Favorable growing conditions on the Prairies for the dry pea and lentil pulse crops resulted in a boost in production as seen in Friday's Statistics Canada report which increased production prospects for most Canadian crops. Estimated production was both higher than July estimates, as well as above the estimated production for 2012.

At 2.380 million acres, 2013/14 lentil acreage is the lowest estimated acres since 2008. The five-year average is 2.53 ma, while the 10-year average is 2.06 ma. With estimated average yield reported at 1,619 pounds/acre, this would become a record yield, surpassing the 2009 yield of 1,415 pounds/acre, after experiencing steady yields over the past three years.

Total lentil production is estimated at 1.709 mmt, which is 11.1% above 2012 production, although is almost 15% below the record production of 2 mmt produced in 2010. This production increase will add 136,000 mt to 2013/14 supplies from the previous July estimate and given most recent supply and demand tables issued by Ag Canada, could boost the stocks/use ratio from 17% to 25.6%, given the estimated 300,000 metric tonne carry-in and leaving current demand estimates static. This would be a significant jump from the 14% stocks/use ratio estimated for the 2012/13 crop year.

The Prairies dry pea seeded acreage has been estimated at 3.345 ma, which is below last year's acreage of 3.73 ma. At the same time, an amazing average estimated yield of 43.1 bushels per acre, which represents a 25.6% increase over the five-year average, is suggested to lead to a record production of 3.781 mmt. This level of production adds an additional 477,000 mt to the previous July estimate, which could result in a jump in the stocks/use ratio from the current estimate of 10% to 25%, given the current 174,000 mt estimated carry-in while leaving current demand estimates static. This would be five times the estimate for the 2012/13 stocks/use ratio of 5%.

Moving forward, eyes will remain on issues that could tip the balance on the global supply and demand tables. The Indian Agriculture Ministry recently announce that the kharif, or summer crop pulse crop, has seen a 4.96% increase in pulse acre plantings, bringing the total to 26.32 ma. India's 2013/14 production between the kharif and rabi (winter crop) is expected to reach a record.

Also of concern is the ongoing India rupee weakness. The currency has lost approximately 15% of its value since early 2013 which increases the cost of imports, while inflation in the country already remains high.

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

(ES)

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