Durum

Export sales of durum have slowed some in recent weeks, although domestic demand has remained steady. In the meantime, prices have also slipped slightly.

“We have seen cash bids for durum come down a little,” said Erica Olson, market development and research manager for the North Dakota Wheat Commission. “We’re seeing quite a few around $5.50, but there are still some that are closer to that $5.80-$5.90 range.”

At the Minneapolis Durum Cash Index the price was $5.63, which is similar to two weeks ago.

“We’ve seen export sales slow a little, but domestic demand is still quite strong,” she added.

In terms of exports, Olson noted that after September new durum sales started to drop off. This was not completely unexpected, however.

“We had very strong early-season sales and we saw customers buying ahead of time,” she said. “The other thing is that as we get closer to the Great Lakes port closing, we tend to get in a quiet period for durum. So we’ve seen new sales back down a bit.”

U.S.-shipped durum exports are still running slightly ahead of average, but similar to last year’s pace. U.S. durum export sales right now are at 20 million bushels (MB). That’s down from 25 MB a year ago.

As to where these exports are going, Olson noted that sales to Italy are similar to last year’s level and sales to Latin America are ahead of last year’s pace. The biggest deficit is to North Africa where the U.S. has had zero sales there this year. A year ago U.S. durum sales to that region totaled 4.5 MB.

“This is a bit disappointing,” she said. “We know they had a drought over there. Their import demand is expected to be higher, but we’re not seeing that demand right now.”

Olson also pointed out that, in fact, Canadian durum sales to North Africa are down, as well.

“Granted, we only have data through September, but (Canadian durum) sales are also down to that region. In fact, Canadian sales overall are down about 7 percent,” he said.

The International Grains Council (IGC) had forecast import demand for that region to be up by a third, according to Olson. So either that region hasn’t made those purchases yet, or it could be that Europe or another location is getting some of that business. Olson explained that there’s a two-month lag in the time the data is received so there isn’t a real clear picture of where sales actually stand.

Domestically there is still strong demand for durum.

“We’re still seeing strong pasta demand,” she said, adding that USDA’s National Agricultural Statistics Service recently released its flour grind data that showed semolina production for the third quarter is 11 percent higher than a year ago. “It is down from the previous quarter when we saw the pandemic high, but we’re still seeing that strong domestic demand.”

Olson also noted there has not been a lot of producer selling at this time, mainly because of the current price situation.

“Obviously, the prices really don’t incentivize producer selling,” she said. “The other thing is the system is mostly handling corn and soybeans, so that’s where the focus is right now.”

In the World Agricultural Supply and Demand Estimate (WASDE) report, which was released Nov. 10, USDA increased domestic use by 3 MB based on the strong pasta demand taking place across the country. The domestic use figure is currently at 92 MB.

Ending stocks dropped by 3 MB down to 34 MB.

There were adjustments made in other durum producing countries. In IGC’s October report, the agency made some small adjustments to production, basically to match what the internal country estimates were. In that regard they increased production in the U.S. and reduced it in Mexico.

The IGC did lower demand slightly, however ending stock levels on a world basis are still forecast at a 6-year low of 279 MB.

“We’re still seeing tight durum stocks, and it will be interesting to see where the winter takes us,” Olson said. “Are we going to continue to see strong domestic demand? What will our export situation be?

“The other big thing is price,” she continued. “With the tightening of stocks we still aren’t seeing a lot of price movement. The other thing to consider is the premium over spring wheat has narrowed quite a bit. If we look toward planting already, that’s not going to be a positive factor to gain durum acres next spring.”