Canadian farmers could swing from grains to the likes of lentils and beans in their sowings plans even more strongly than has been expected thanks to a rise in pulse prompted by fears over Indian and Turkish crops.
Canadian farmers are already expected to lift lentil plantings by 19.5% to 2.86m hectares, and seedings of dry field peas by 21% to 3.98m hectares, amid a switch from traditional grains, such as barley and wheat, official data showed two weeks.
Thanks to rail hiccups blamed on a cold winter, many Canadian growers have been left with large grain stocks, or been forced to accept large discounts from merchants attempting to make up for restrictions on their handling volumes.
However, the rise in sowings might prove even larger thanks to a run up in values spurred by production concerns in two of the main consuming countries, Canada-based Alliance Grain Traders, one of the world's biggest pulse merchants, said on Monday.
In the US, prices of dry edible peas rose 11.2% last month to $14.90 per hundredweight, according to official data.
Pulse prices are being supported by a lack of "clarity" on crop prospects in India, where "wet and cool conditions" have spurred a "high degree of variability" in estimates for pulse crops, and where the prospect of an El Nino weather pattern has raised concerns of a below average monsoon.
Turkish prospects have been undermined by dry conditions, as highlighted by US Department of Agriculture staff, who on Friday warned that a dearth of rainfall and late frost would cut wheat production by 3.0m tonnes to 15.0m tonnes this year.
In "key consumption markets for pulses, including India, Turkey and the Middle East/North Africa region", a strong start to 2014 for imports, as typically expected for early in the calendar years, is "expected to extend into the second quarter, which is traditionally a slower shipping period", Alliance Grain Traders said.
Indeed, "deficiency in production in India and Turkey may result in continued buying activity throughout 2014 to meet domestic and regional demand requirements".
This may sap "the remaining stocks Canada has from both the 2013 harvest and projected 2014 production".
Canada's lentil stocks, at 648,000 tonnes as of the end of March, have more than halved over two years.
Alliance Grain Traders' comments came as the group unveiled underlying earnings down 38% at Can$3.18bn for the January-to-March quarter.
Although revenues rose 12.6% at Can$311.3m, earnings were undermined by higher administration and financial expenses, a reflection of expansion efforts.
The group also highlighted that its Canadian volumes were "affected by rail issues and resulting railcar shortages during the quarter, a factor also evident in a rise of Can$11.1m in North American inventories during the quarter, and which remains an issue.
"Freight and transportation issues in Canada have impacted Alliance Grain Traders' ability to ship volumes of product through ports in Vancouver and Montreal which may result in timing related issues surrounding sales and shipment," the group said.