Durum planting got off to a slow start with the extended winter/delayed spring, but producers are starting to make some headway. In the meantime, producers also saw durum prices slip a little bit heading into early May.
“With durum, we’ve seen a little bit of a slip in the market. It probably wasn't unexpected just given some of the weakness in the other wheat markets,” said Jim Peterson, marketing director for the North Dakota Wheat Commission.
“Ironically, some of the other wheat markets are starting to bounce back a bit now, so we’ll see what happens with durum, whether this is just a short-term drop in the market and we bounce back to prices where they had been through much of April,” he added.
Current cash bids across the region range from as low as $8 to a high of $8.50 with an average of $8.25. The price at the Minneapolis Durum Index, which is a broader range of some of the values, was down to $8.10 per bushel as of May 8. Back during the third week in April, the price was at $8.50, so it’s about a 40-cent loss in the market.
“Either way, it’s probably just a proxy value as there isn’t a lot of deep trading or volume at these levels,” he said. “Obviously, producers are busy planting, so mills are probably covered in the short-term. Everybody’s trying to posture or wait and see what 2023 values will be.
“Certainly, there’s a lot to uncover with the U.S. and Canadian durum crops largely unplanted as of yet,” he added.
Also, at this time it’s a pretty critical window for the North African and southern European durum crops. Peterson feels the market can still show some bounce back, depending what happens with weather in each of those two situations.
Europe right now is looking at a larger durum crop than a year ago. However, there’s some debate on how much impact the recent heat in parts of France and Spain have had on the crop, whether it lowers the estimates a bit or not.
On the flip side, Peterson noted the durum crop in Italy and more northern areas of Europe is faring much better.
“As of right now, there’s not a lot of panic in the market, but I think there is some support under it until they get into harvest and through this weather period, just because projected inventory carryover in Europe is historically tight,” he said.
In North Africa, Morocco, and large parts of Tunisia and Algeria, were doing fairly well through March and early April, but it’s turned pretty hot of late. Some areas along the Mediterranean Sea have benefitted from some better moisture, but a large part of their growing area has suffered under heat and drought.
“The crop size there looks to be smaller than what was thought 30-40 days ago, which is positive for us because that’s likely going to lead to stronger imports,” Peterson said.
In North America, Canada is starting to do some planting, but there’s no official provincial reports that have been out yet with estimated numbers. Parts of Saskatchewan did receive a late-season snow storm, but by and large, Manitoba has got some of the same planting delays as parts of North Dakota and Minnesota. Further west it becomes dry in many areas. Alberta right now is fighting a fair amount of wildfires, which are fairly early in the season.
“I think the bias has been drier in many areas in Canada relative to North Dakota and Minnesota as well this winter, so they’re going to need some moisture,” he said, adding the drier conditions are probably beneficial for timelier planting, but they’re certainly going to need some moisture replenishment before crop impact.
In new news out of Canada, Stats Canada came out the end of April with its plantings report. The agency is projecting less than a 1 percent increase in durum acres to 6.1 million acres.
“The trade was initially thinking there would be a decline, but nonetheless, it’s not a major shift to durum by Canadian producers this year,” he said. “But it would still be about 6 percent higher than the 5-year average, so if they’re able to pull off average type yields, depending on the growing season, they’ll have a pretty good crop to market.”
The big thing, Peterson noted, is that similar to Europe, Canada’s ending inventories are historically tight, so there’s not a lot of room for crop issues.
Source: agupdate.com
Photo Credit: GettyImages-Alex Chai
Categories: North Dakota, Crops, Wheat