Principal field crops, March 2012 (intentions)

[IAMTHEMOLE]

How many acres of grass and or hay have been turned into crop land? Seems like there might be a little more than usual. Is there any public information available on this?

[furrowtickler]

You could be right dave there is some good moisture forecast for the weekend accross the southwest.
There is some hay/pasture comming out around here but strong cattle prices are keeping most of it in. Some guys are switching to corn grazing and relying less on hay, those acres are being turned over but small amounts.

[charliep]

I suspect the survey would catch some of this but likely not a lot/be suspect. How much land is hay/pasture land is getting broken up in your community? You may disagree but there is the beginning of light at the end of the tunnel for the cattle industry and that will signal more cow/heifer retention - more pasture/hay needed. Also gets into how much hay being carried forward and the impact of weather on hay yields/pasture carrying capacity this summer.

More of an issue to me is silage acres and the impact of reduced feeder cattle numbers/backgrounding.

[errolanderson]

Thought on basis . . . new crop basis
levels remain incredible (over Nov/Jan
etc). This suggests that crushers and
exporters have strong sales for
fall/winter movement (likely to China).

With Stats Can supportive to canola plus
strong basis levels, canola likely won't
break unless soybeans break. Soybeans
are key.

But can new crop canola futures now
break into new highs? IMO . . . Nov
canola at $585/MT meets formible
resistance. As crazy as this sounds, it
new crop doesn't break into new highs,
it may then fail back. We'll have proof
in the pudding soon.

Errol

[furrowtickler]

One thing though on any additional canola acres. Not enough fert currently available and prices are a big limiting factor on any swing acres regardless of market prices. Some will not get enough fert for planned acres already.

[errolanderson]

furrowtickler . . . this will be an
interesting close today. IMO, should new
crop weaken into the closing bell,
tomorrow canola may begin to sell-off.
But should we have a strong close, this
market may break into new highs. To me,
this is a 'crossroads day' for our
canola market.

This is an amazing demand-driven market,
that's overbought (if that makes any
sense).

Errol

[furrowtickler]

your absolutely right, the close should tell the tail.

[charliep]

I will add to the confusion by highlighting the strenghth in old crop soybeans and the fact the driver is mainly the meal side. Highlights SF3 comments about tightness in US old crop soybeans. An interesting question will be which will have a bigger impact on the market (other things equal) - market expectation US farmers have seeded an extra 2 million acres of soybeans (signals are there) or an extra million acres of canola?

Lots of permutations and combinations of things that could happen going ahead. Perhaps why I am comfortable encouraging forward pricing. Not because we know the future but because we don't know.

[Cattleman]

Looks like quite a pick up of barley acres as well. If we have more normal spring weather, do you think that is realistic. From what I seemed to be picking up, there seemed to be some uneasiness about Malt contracts which I thought would be negative to barley acres.

Maybe the high priced barley in Manitoba and high input costs finally has more people looking at barley?

[charliep]

Intentions were 8 mln acres, up from 2011 but well below what has been seeded over time (recent history 10 mln acres). Cattle numbers are down so the demand has been reduced.

Assuming silage/green feed of 500,000 acres and trend yields, that is about 9 million tonnes. 7 million domestic feed. 2 million malt. If this is correct, barley supplies will remain tight. Wheat has helped in Alberta (2011 - poor quality crop, 2012 - cheap mid quality/protein) with 2012 an unknown at this point.

Guys in Sk and Mb. can comment on their provinces.

[charliep]

A year out on my comments on wheat - poor quality 2010/11. Cheap - 2011/12