Canadian farmers intend to plant more peas, lentils, barley, and corn this spring but fewer acres of wheat, canola, soybeans, and oats compared to a year ago, according to Statistics Canada’s Principal Field Crop Areas’ March Farm Survey.
Strong demand from India for pulses following two back-to-back years of drought in that country--as well as a decline in the value of the Canadian dollar--have encouraged many Canadian producers to return to growing pulses after two decades of growing other crops.
This year, Canadian growers said they intend to plant 16% more acres to peas, a total of 4.28 million acres, and 5.41 million acres of lentils, a 30.1% increase over last year.
Canola Market Tightens
When it comes to canola, which is Canada’s second-largest crop, farmers intend to plant 19.3 million acres to the oilseed in 2016. That represents a 3.7% decline from last year.
However, canola prices have rallied since the March survey. That means canola acres could increase somewhat from Statistics Canada’s estimate, according to Wayne Palmer, senior analyst at Agri-Trend Marketing in Winnipeg. Palmer was one of two analysts on a post-report MGX press call.
“We need more canola than the 19.3 million acres,” Palmer said. “If that number sticks, we will be very tight in the 2016-17 carryover.”
This week, commodity funds started scaling in canola purchases, sending prices upwards. Canola planting typically runs from mid-May to mid-June, so producers in Canada have plenty of time to shift back to canola.
Wheat Acres Decline
Canadian farmers said they intend to plant 23.8 million acres of wheat—Canada’s largest crop—which is down 1.1% from last year. This year’s expected 16 million acres of spring wheat is a 1-million-acre decline from last year. Durum wheat acres are expected to climb 5.2% to 6.1 million acres, while winter wheat for harvest is expected to increase 31.6% to 1.7 million acres.
“All-wheat intended acres were close to expectations,” said Brian Voth, president of Prairie Farm Consulting, in Winnipeg, and the other MGEX post-report analyst. “Wheat acres are getting replaced by pulses.”
Canada’s supply-and-demand picture for wheat has improved dramatically since 2013’s massive wheat crop. Each year since then, both acres and production have decreased, Palmer noted. With the decline in the value of the Canadian dollar, Canada’s wheat exports also have picked up. “Wheat ending stocks are now sufficient,” Voth said. “We are not going to be tight wheat, but we are now in a manageable situation with stocks.”
If the Canadian dollar climbs another 10 cents or so against the U.S. dollar into the 85-cent range, though, Canadian wheat exports could slow and stocks could once again build, he added.
Corn, Soybeans, Barley and Oats
In Canada, farmers intend to plant 5.3 million acres of soybeans in 2016, a 1.9% decrease from 2015. Soybean acres peaked in 2013, and acreage has declined an average of 100,000 acres each year since then.
Canadian producers also expect to plant 3.5 million acres to corn, a 6.2% increase over last year. “This spring, corn penciled out as one of the most profitable crops to grow,” Voth noted.
Barley acres are expected to rise 3.8% to 6.8 million acres, due to good prices on malt barley contracts this past winter.
Oat planting intentions for 2016 of 3 million acres are down 10.9% from last spring. “Prices for oats have been flat for 12 to 18 months,” Voth said. “There is not a lot of incentive for producers to grow oats.”