Bullish: Canola(mildly), Neutral: Barley, Flax, Pea, Bearish: Lentil, Durum Go here for full report.
Durum – The print is bad – 5.1 when largest estimate was 4.8 and average was 4.5. Hopefully Canola can hold it up as acres have shifted out of Durum and into Canola since survey – if they haven’t price spread may have to widen further.
Canola – slightly below average estimate of 20.6, coming in at 20.4. Should confirm the Bullishness we’ve seen to date but not a catalyst for a higher move on its own.
Lentil – not at all Bullish coming in at 2.5 million verse last year’s 2.6 – a meager drop of 4.3%. Pipeline is more empty than this time last year and Global area will be down, but will be at least 2013 before we are happy with Lentil prices again. This report won’t give us a run-down on Greens vs Reds or Large vs Small, but my guess is that we are flat to higher Large Green and way up year over year on Small. Not good for either market.
All Wheat – was slightly above expectations at 24.3 and would be considered mildly Bearish but it’s Durum that is much of that extra acreage.
Pea – within expectations at 3.3, mildly Bearish on expectations, but having seeded 3.6 million in 2010, we don’t think this is too bad, though that is 42.5% more acres than last year.
Flax – At over 1.0, is not out of expectations but a very large increase of 49.6% over last year. With struggles in the Ukraine (which claimed our dominance spot on the export front) this might all be needed depending how badly that crop took the weather stress, and if the EU is willing to spend.
Summerfallow – is down to 4.0 from 12.4 in 2011 and 10.8 in 2010. This is fairly priced in, but worth noting as StatsCan believes that almost all flooded land over the last 2 years will be seeded. This was to be expected given our win.
Overall, not an earth-shattering report, but it will impact Durum to some degree if acres go in as producers planned when the survey was taken about 1 month ago. If Canola can grab a bid on this report and/or the current Bullishness in Corn exports, or Argentine frost scares, Durum can still struggle higher as it still was undervalued by 50c in our opinion given acreage risks in N.American and weather risk in W.Europe/Africa.
