Pulse acres could rebound in next few years

The area planted to pulse crops in Canada could take another leap forward in the next couple of years, Greg Kostal of Kostal Ag Consulting said during a presentation at the Cereals North America global grain conference in Winnipeg.

Pulse area in Canada has its ebbs and flows, he said. As prices become favourable, farmers increase their acreage — then there is an oversupply and trouble moving it. But then prices move lower because of large supplies, and acreage goes down.

Currently, pulse crops take up about 10 per cent of seeded area in Canada, Kostal said.

Another crop likely to see an increase in acreage in Canada is corn, Kostal added, noting Monsanto has a goal of eventually planting 10 million acres of corn in Canada. But he doesn’t expect that to happen for a long time.

“I struggle to believe that they’re going to get into 10 million acres because all other genetic improvements in other crops are going to continue to move along,” he said. “About three to five million acres is more realistic in five to 10 years.”

Canadian canola area will also likely continue to grow in the coming years, Kostal said, adding that many farmers are in the mindset that they “can’t afford not to grow canola.”

“The perception is not how good canola yields are,” he said. “It’s how bad they aren’t in difficult times.”

Agronomists recommend a one-in-four rotation for canola, he added, but farmers are proving smaller rotations of one in three, one in two and even one in one can work.

With canola production expected to continue to increase in Canada, as genetic improvements and larger yields will continue, prices should continue their downward trend.

In the fall of 2014, he estimated, cash prices for canola in Canada would be around the $9 per bushel mark, though there will be movement above and below that level throughout the year.

Canola futures were between about $10 and $11 per bushel in early November 2013, according to Prairie Ag Hotwire data.

Wheat prices will likely trend downward as we work through the large expected supply surplus this year — but values could come off their lows by next fall if demand remains strong and basis levels narrow, Kostal said.

He added that $6 per bushel “would be a reasonable average” for wheat prices next fall.

Early November 2013 cash wheat bids for spring wheat were around the $5.60 to $5.95 per bushel range, based on pricing available from a cross-section of delivery points in Manitoba, Saskatchewan and Alberta.

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

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