By farmathand

This is a guest post from FarmLink Marketing Solutions.

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In the course of analyzing the medium and long-term outlook for the various crops that we market for farmers in western Canada, the analysts at FarmLink regularly review and reformulate new-crop acreage estimates. Together with the 2015/16 carryout and assuming a normal yield, this gives us a look at 2016/17 starting supplies. Supply and demand are constantly changing, but sometimes the balance tips dramatically enough from one year to the next to create strong market signals.

For example if 2016/17 supplies are going to build to price-depressing levels, farmers might want to look at alternative planting options. On the other hand, even in some cases where acres are forecast to rise dramatically, there might be an increase in demand at the same time and tight enough carryover stocks to keep prices high into harvest.

Here are our recently reviewed year-on-year changes in planting intentions, and some thoughts on possible implications for growers’ seeding and marketing plans in 2016/17.

Canola: Despite lacklustre return prospects for 2016, canola’s proven resilience to yield above expectations even in adverse weather will support acres. We anticipate 2016/17 canola area won’t rise as much as some believed just a few months ago.

Wheat: With multiple headwinds limiting upside in global wheat markets, local prices haven’t been able to maintain grower interest in western Canada. New U.S. varieties and mid-grade classes like soft white are steadily pulling acres out of CWRS, thanks to improving yields and marketing opportunities.

Oats: Weighed down by bearish U.S. grain futures, oats prices have been flat throughout much of the past year. Yet supplies are growing thin, and demand is fairly inelastic. This market could see some strength next year if prices don’t work harder before seeding to get more acres in the ground.

Barley: Heading into the fourth year of deregulation, malt barley markets are becoming more segregated and specific. Farmers should be sure to check with the buyers before choosing a variety as some malt barley varieties are losing favor and are becoming very hard to sell.

Peas: Yellow pea acres are forecast to rise dramatically, with marginal areas forecasting dramatic increases. In southwest Manitoba and north-central Saskatchewan for example, reports are for yellow pea acres to double. However, yellow pea seed has become almost impossible to find which may limit acres planted, and encourage additional lentil acres. Yellow peas do not pencil out better than lentils, so the acres could be flat in regions where there’s that choice. Green peas are still over supplied and heavily discounted to yellows, and seeded area is expected to be smaller once again in 2016.

Lentils: Pulses are stealing acres from cereals this season, and there will be a lot of new lentil acres going into marginal/non-traditional areas. Lentil acres are estimated to reach historic highs in 2016, with the bulk of the increase coming from red varieties.

Durum: Our current forecast is for durum acres to be down a shade from last year but on the upper end of the historical range. However, acres could potentially swing substantially either way between now and spring, depending on the relative price performance when compared to other crops like canola.

Mustard: Prices have been very strong in recent years and demand is forecast to remain steady to higher. There are some new and interesting long-term opportunities for growers interested in moving acres into mustard. However, producers should be careful shifting acres from canola to mustard. Any dark seeds in yellow and oriental mustard aren’t easily cleaned out and will downgrade the finished product. Leftover canola found in brown mustard poses a problem, because it goes to Europe and becomes a GMO issue.




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