Canada Markets

AAFC Hikes Estimate for Lentil Ending Stocks

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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AAFC hiked its forecast for lentil ending stocks by 200,000 metric tons in March to 1.1 million metric tons, the largest on record (yellow bar). Ending stocks as a percentage of 2017/18 disappearance is calculated at 60.3% (black line) but still falls short of the level reached in 2010/11. (DTN graphic by Cliff Jamieson)

The March supply and demand tables in Agriculture and Agri-Food Canada's Outlook for Principal Field Crops shows a 200,000 metric ton reduction in estimated lentil exports since February to 1.3 million metric tons, down 47% from the volume exported in 2016/17 and would be the smallest annual exports since 2011/12. This month-over-month revision was one of the few changes made in the March report.

This data would suggest an uptick in the pace of exports in the second half of the crop year, with January data showing 740,858 mt exported in the August-through-January period, down 56% from the same period in the previous crop year.

This change in exports has resulted in a corresponding hike in the ending stocks forecast for 2017/18 to 1.1 mmt, while as seen in the attached graphic, the largest ending stocks ever realized over the years covered by Statistics Canada analysis of lentils. This would suggest a 249% increase from the 315,100 mt carried out of 2016/17 and would be almost identical to the year-over-year volume increase in ending stocks seen from 2009/10 to 2010/11.

AAFC has released an early estimate that would suggest that producers will pare new-crop acres by 27% or 1.2 million acres to 3.2 million acres, ahead of the official estimates to be released by Statistics Canada on April 27.

The impact of high carryouts on seeded acres is perhaps not so clear. When considering the crop years on the chart that point to the highest volumes carried out of the crop year, or 2010/11, 2011/12 and 2013/14, we see a mixed response in terms of acres planted in the spring for the following crop year. In the spring of 2011, producers planted 25.8% fewer acres, in the spring of 2012 producers planted 2% fewer acres and in the spring of 2014 producers planted 14.7% more acres.

Perhaps the ending stocks as a percent of total disappearance is a better indicator. Of the three crop years that resulted in the highest stocks/use ratio, including both exports and domestic disappearance, which are 52.2% in 2005/06, 66.8% in 2010/11 and 55.3% in 2011/12, producers cut back on acres in all three years. The highest was a 29.4% reduction seen in 2006 while the average across all three years was a 19% or 508,000-acre reduction.

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

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