Farmers calling a bluff on trade disruptions, based on StatsCan seeding intention report

The issue:

Taking a look at Friday’s StatsCan report, it looks like Canadian farmers are calling the bet on geopolitical trade disruptions. It appears farmers essentially see existing and potential trade barriers as a bluff worth calling in favour of other factors.

Some examples:

• Durum – Even though there has not been a load of durum shipped to Italy, our number one export market, since October, Western Canadian farmers intend to plant 11 percent more durum than 2017 at 5.78 million acres.
• Lentils and field peas – With Canada’s largest customer of pulse crops — India — attempting to boost domestic production of pulses by shutting out imports, there was an expectation of a significant drop in pulse acres in Western Canada. Both lentils and field peas had lower intended acres in the report, but the drop was not as much as expected.
• Soybeans – U.S. farmers are looking at boosting their soybean acres this year. On top of that, with the threat of a major trade war between the U.S. and China, there could be a real opportunity for Canadian soybean exports to China. The overall drop in intended soybean acreage can be partially attributed to dryness and poor yields in Saskatchewan, but a drop in Ontario and Quebec bucks conventional thought. Ontario farmers expect to seed 3.0 million acres, down 1.8% from 2017, while Quebec’s acreage is expected to decline 12.3% to 863,000 acres according the StatsCan report.

More info:

• StatsCan delivers big surprises in first acreage estimates