Lentil acreage a surprise

The large amount of lentils seeded in Western Canada, as per Statistics Canada’s latest acreage report, came as a surprise to market participants who had generally expected to see a downward revision.

The federal statistics agency on Wednesday estimated lentil area at 2.61 million acres, which compares to 2.46 million acres in the April 2012 report, and 2.57 million acres in 2011.

"There was some talks that in between the April report and this one, that we could’ve had that acreage number actually drop," said Ron Frost, an analyst with Frost Forecast Consulting in Calgary.

Bobby Leavins, an analyst with Rayglen Commodities in Saskatoon, said a lot of the trade thinks the StatsCan report isn’t accurate, and acreage is actually around 2.2 million for lentils.

However, he said the trade does need to keep StatsCan’s number in mind.

"StatsCan is really seldom off more than 10 or 15 per cent," Leavins said. "So, I guess we’ve got to take a look at it pretty serious."

One of the reasons acres are higher this year might be because high fertilizer prices are making lentils a less expensive cropping option compared to oilseed and cereal crops, he said.

Producers may have also planted more lentils because they are optimistic prices will be stronger than they are now, he said.


No. 1 large green lentil bids are currently topping out at 26 cents per pound, while new-crop bids can be found around 24 cents per pound, according to Prairie Ag Hotwire data.

"I think the large green lentil growers had that 25- to 30-cents per pound pricing that they’ve got the last couple of years in mind at crop planning time, so they probably just kept their acres the same."

If the market continues the way it is now, it will be difficult for lentil prices to climb, Leavins said.

"If buyers keep being passive, and the weather stays OK, it’s going to be tough to get up to that 25- to 30-cents per pound mark," he said.

However, he said, anything could happen and prices could surge any day.

"If we get kind of a wreck here, or there are problems in a country that also produces a lot of lentils or crops that lentils can be substituted for, then there’s an opportunity there," Leavins said.

–Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

Related stories:
EU relaxes tolerances on glyphosate residue in lentils, June 26, 2012
New-crop Prairie lentils seeing weak demand, June 22, 2012

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