2021 Premiere Pulse Virtual Session Lentil, Dry Bean, Soybean Outlooks in SK
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Marlene Boersch Mercantile Consulting Venture Inc. Outline Lentil Ending stocks ’20/21 & acres ’21/22 Balance sheets for 2020 & 2021 YTD & ‘21/22 exports & outlook Dry Beans Global ed. bean situation How do Cdn. beans fit in? Soybeans Production & usage Where to go from here? Mercantile, March 2021 2 What is different this year? Demand for pulses unusually high vs stable supply Partially supported by high feed demand Rail availability in Cda. unusually good Though cntr. frt. difficult; cntr & bulk frt. costs increasing Prices for major crops at multi-year highs Much bigger competition for 2021 acres !! Excellent pxg opportunities for the ‘21/22 crop Have gone from S push to D pull markets. Mercantile, March 2021 3 Rail availability … Canadian Grain Exports (CGC numbers) ('000 MT) Canola Peas Lentils All Grains Crop Year To date (wk. 29) 6,707 1 ,784 5 78 31,051.0 Year Ago (to wk. 29) 5,092 1 ,555 4 59 23,148.0 Change this Year in MT 1,615 2 29 119 7 ,903 Change this Year in Percent 132% 115% 126% 134% Mercantile, March 2021 4 2021 premiere pulse virtual session Mercantile, March 2021 5 What factors do you need to make decisions? Current crop (2020) Starting supply base Cda. (& competitors) Pace of usage/ exports (YTD offtake) Expected X pace Remaining stocks (here/ elsewhere) New crop (2021) Forecast C/I + Expected acres (+/-) = Forecast Supply (Cda. & competitors) Demand outlook/ timing new supplies Mercantile, March 2021 6 ‘20 Lentil numbers: comparison to last year Lentil Balance AAFC Feb. Merc Merc Sheet Merc 17/'21 Cdn. acres up ~15% & Merc ('000 mt) 2017-18 2018/19 2019/20 2020/21 2020/21 prod’n up ~26% seeded Ha Harvested HA (-14% ac) (no ∆) (+15%) sdd. acreage 4,405 3,767 3,767 4,350 Supply ~unchanged! (due low C/I) hrvstd. acreage 4,383 3,729 3,700 4,307 4 ,233 Yield (mt/Ha) Big question: usage Yield (lb/acres) 1,280 1,250 1,370 1,500 1,499 production 2,558 2,136 2,341 2,960 2,868 Exports up or down?? imports 30 40 90 90 100 ttl supply 2,988 3,101 3,148 3,135 3,177 exports 1,542 2,034 2,863 2,700 2 ,700 Merc: 2.7 mln mt; AAFC now ttl dom. use 520 350 200 250 327 ttl. usage 2,062 2,384 3,063 2,950 3,027 2.7 mln mt vs. 2.9 prev. carry-out 926 717 85 185 150 stock-use ratio 45% 30% 3% 6% 5% Mercantile, March 2021 7 By lentil type Est. - Canada - 2020 Lentil & Prod'n Acres By Type (mt) 2020/'21 crop est. large green small green red other total acreage (est.) 973,300 265,800 2,931,700 65,000 4,235,800 % acres 22% 6% 67% 1% yield est. 1,329 1,634 1,684 1,200 prod'n proj'n 586,729 197,003 2,239,378 35,380 3,058,491 C/I (est.) 55,000 20,000 8,000 2,000 85,000 imports 55,000 supply est. 641,729 217,003 2,302,378 37,380 3,198,491 Export est. 550,000 165,000 2,017,100 20,000 2,752,100 Dom. Use est. (Dom., Sd, Fd, Waste) 60,000 10,000 153,000 2,000 225,000 Ending stock est. 31,729 42,003 132,278 15,380 221,391 stock-use ratio 5% 24% 6% 70% 7% Mercantile, March 2021 8 Export performance 1.2 mln mt to end Dec. India: Took 391k mt during shipped Ytd prorated Country 18/19 19/20 P'20/21 (Dec.) '20/21 Aug.-Dec. Are using an World 2,030,837 2,863,024 2,700,000 1,193,673 2,864,815 India 5 53,266 907,024 8 50,000 390,872 938,093 850k mt for ‘20/21. Turkey 1 22,076 418,674 5 25,000 221,552 531,725 Bangladesh 1 69,078 250,426 2 00,000 73,772 177,053 Need to ship 65k mt/mos. Jan.- Egypt 84,357 7 0,786 60,000 38,895 93,348 Sri Lanka 84,335 6 6,413 60,000 29463 70,711 July to reach the export target UAE 2 04,275 265,312 2 40,000 102,197 245,273 Pakistan 1 14,400 8 3,592 75,000 34,256 82,214 Turkey: Increased export Spain 16,944 1 9,541 20,000 8,563 20,551 Italy 24,443 2 7,207 25,000 13,767 33,041 est. to 525k mt for the yr.; Algeria 61,004 5 8,653 60,000 30,225 72,540 less competition Kazakhstan. Mexico 73,839 3 2,050 30,000 12,340 29,616 Morocco 30,597 6 2,588 60,000 37,084 89,002 At 222k mt shipped to Dec., Colombia 91,442 109,243 90,000 23,018 55,243 Other 4 00,781 491,515 405,000 177,669 426,406 leaves 43k mt/mos. rest cr. yr. Merc., Feb. 5/ '21 Mercantile, March 2021 9 2020 crop lentils Ending stocks: ~185k mt; small 6% stock-use ratio Recent pxs strong! GOI: “1.3 mln mt lentil crop” (+18% to the prev. yr.), think > likely ~1.1 mln mt. pigeon pea crop down by ~15% from earlier est’s due to weather? Recommendation: Sell out O/C at prevailing pxs: $38 Lrge Grns; $36 Sm. Grns.; $30 Reds Mercantile, March 2021 10 Harvest weather in India (pigeon pea, lentil) Mercantile, March 2021 11 …. Harvest weather in India (chickpea) Mercantile, March 2021 12 2021 lentil crop considerations Domestic factors: Moisture outlook Rotations/ Disease pressure Return per acre calculations Cdn. production outlook (acres) International factors: Global competitive supply outlook Global demand trend for commodity Reliability export destinations Mercantile, March 2021 13 Return per acre comparisons Current N/C Prices & Ret/Acre over Full Costs lentils green $90.50 current market prices for new crop and return/acre est's Sell lentils red $72.00 yield per value per gross minus variable net full costs profit/loss over acre bushel return cost per acre return per acre per acre full costs variables in blue after var. costs green peas $12.50 canola 41 $13.00 $533.00 $240.00 $293.00 $455.00 $78.00 25% durum wheat 55 $7.75 $426.25 $200.00 $226.25 $415.00 $11.25 peas $97.50 spring wheat 60 $7.00 $420.00 $200.00 $220.00 $415.00 $5.00 flax 35 $17.50 $612.50 $170.00 $442.50 $385.00 $227.50 oats $5.00 Barley 75 $5.00 $375.00 $190.00 $185.00 $405.00 -$30.00 Malt Barley 60 $6.00 $360.00 $200.00 $160.00 $415.00 -$55.00 oats 100 $3.50 $350.00 $130.00 $220.00 $345.00 $5.00 -$55.00 Malt Barley peas 50 $9.75 $487.50 $175.00 $312.50 $390.00 $97.50 15% green peas 45 $8.50 $382.50 $185.00 $197.50 $370.00 $12.50 -$30.00 Barley lentils red 1650 $0.28 $462.00 $175.00 $287.00 $390.00 $72.00 lentils green 1550 $0.31 $480.50 $175.00 $305.50 $390.00 $90.50 15% flax $227.50 MCV, Feb. 19/'20 spring wheat $5.00 durum wheat $25.00 canola $78.00 -$100.00 -$50.00 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 Mercantile, March 2021 14 N/C balance sheet Acreage: +2% Lentil Balance AAFC Feb. Merc AAFC Feb. Merc Merc Sheet Merc 17/'21 P2021/22 17/'21 Merc N/C Prod’n: down 4% (dep. yields) ('000 mt) 2017-18 2018/19 2019/20 2020/21 2020/21 P2021/22 P2021/22 seeded Ha Supply: down 1.4% Harvested HA (-14% ac) (no ∆) (+15%) (+2%) (-1%) sdd. acreage 4,405 3,767 3,767 4,350 4,437 4,201 Exports: Down 5%?? hrvstd. acreage 4,383 3,729 3,700 4,307 4 ,233 4,393 4,139 Yield (mt/Ha) Ending stocks: up 45% from low Yield (lb/acres) 1,280 1,250 1,370 1,500 1,499 1,400 1,436 production 2,558 2,136 2,341 2,960 2,868 2,818 2,700 level last year imports 30 40 90 90 100 90 75 ttl supply 2,988 3,101 3,148 3,135 3,177 3,093 2,925 exports 1,542 2,034 2,863 2,700 2 ,700 2,575 2,500 ttl dom. use 520 350 200 250 327 250 275 Hwvr, also think pulses well ttl. usage 2,062 2,384 3,063 2,950 3,027 2,825 2,775 positioned due increasing food carry-out 926 717 85 185 150 268 150 stock-use ratio 45% 30% 3% 6% 5% 9% 5% shortage (per Husain et al) This is not a supply-push market! Mercantile, March 2021 15 Export details shipped Ytd prorated Country 18/19 19/20 P'20/21 (Dec.) '20/21 P'21/22 To which destination World 2,030,837 2,863,024 2,700,000 1,193,673 2,864,815 2,575,000 India 5 53,266 907,024 8 50,000 390,872 938,093 800,000 could we increase Turkey 1 22,076 418,674 5 25,000 221,552 531,725 475,000 Bangladesh 1 69,078 250,426 2 00,000 73,772 177,053 180,000 exports? Egypt 84,357 7 0,786 60,000 38,895 93,348 6 0,000 Sri Lanka 84,335 6 6,413 60,000 29463 70,711 6 0,000 What are other UAE 2 04,275 265,312 2 40,000 102,197 245,273 240,000 Pakistan 1 14,400 8 3,592 75,000 34,256 82,214 7 5,000 producers & exporters Spain 16,944 1 9,541 20,000 8,563 20,551 2 0,000 Italy 24,443 2 7,207 25,000 13,767 33,041 2 5,000 going to do?? Algeria 61,004 5 8,653 60,000 30,225 72,540 6 0,000 Mexico 73,839 3 2,050 30,000 12,340 29,616 3 0,000 (global competitive outlook) Morocco 30,597 6 2,588 60,000 37,084 89,002 5 0,000 Colombia 91,442 109,243 90,000 23,018 55,243 9 0,000 Other 4 00,781 491,515 405,000 177,669 426,406 410,000 Merc., Mch.