Canadian planting intentions announced
Late in the week, Statistics Canada released planting plans by farmers for the 2018 crops. Much like the Prospective Plantings report released by the U.S. Department of Agriculture at the end of March, this report sets the stage for potential production of major crops in Canada. The market's pre-report estimates and expectations set the stage and actual data compared to those reports shape the market direction that day. For example, canola acreage was huge in 2017, and the market expected another increase in 2018. The Statistics Canada report surprised the market, showing an acreage drop from a year ago, which will be supportive to prices. With that report done, the market will be all about weather and its impact on crops in terms of planting work and early-season development.
Hard red spring wheat futures prices stayed near previous lows, resisting an upward pull from the Kansas City and Chicago contracts. The U.S. winter wheat crop continues to struggle, leading to some support. Statistics Canada's report showed a big jump in planted area for wheat, showing 25.3 million acres are expected for all wheat varieties in 2018. This is a 12.8 percent increase from 2017. Spring wheat area is set to increase 15.4 percent to 18.2 million acres.
U.S. spring wheat planting was behind the normal schedule last week when just 3 percent had been sown. This week's progress report from the U.S. Department of Agriculture showed no change from last week as farmers remain hampered by unseasonably cold weather and precipitation. This is well behind the normal pace of 25 percent completion. Also on the same government report, despite rains falling in the primary winter wheat growing region of the U.S., conditions did not improve. Just 31 percent of the crop is rated good or excellent and 37 percent is rated poor or very poor.
Statistics Canada's report on planting intentions showed farmers are going to increase durum area in 2018. Total acreage is expected to rise 11 percent to 5.8 million acres. Prices have remained stable.
The canola market got a bullish surprise as farmers intend to plant fewer acres this year. Statistics Canada reported that total area will drop to 21.4 million acres (a 7 percent drop from 2017). Soybean acreage in Canada is expected to fall 11.4 percent from the record planted in 2017, to total 6.5 million acres. Even though corn planting in the U.S. was slow to start, soybean efforts have begun. No real work has started in the too-wet Corn Belt, but major progress has been made in some southern states like Louisiana and Mississippi. Overall, 2 percent of the crop has been planted, which is in line with the five-year average pace.
Peas and lentils
Pulse planted area is expected to drop as farmers fear a lack of global demand (led by India) will reduce prices and therefore returns. In 2018, farmers expect to plant 4.1 million acres of lentils (an 8.1 percent decline from last year) and 3.9 million acres for dry field peas (a 5.5 percent decline from 2017).
Barley area in Canada is expected to increase to 6.1 million acres, this year, a 5.1 percent jump from 2017. The same weather that has slowed spring wheat planting has slowed barley planting efforts, as well. Only 11 percent of the crop has been sown compared to 33 percent for the five-year average pace and 25 percent a year ago. The crop has started to emerge, with 2 percent reported by the U.S. Department of Agriculture.