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Durum prices go up before stabilizing again

Durum prices go up before stabilizing again

Durum

The durum market did see some price appreciation in early to mid-December, and since then prices have been relatively stable again, according to Erica Olson, market development and research manager for the North Dakota Wheat Commission.

The most common bid across the region is about $6 with prices ranging from $5.50 to $6.25.

“We really haven’t seen much of a demand surge right now, which is why we’ve seen prices just sitting there,” Olson said. “Producer selling has been relatively slow. But at the same time, domestic buyers seem very comfortable with supplies, so there’s really no push for prices to go higher right now.

“We need to keep in mind that even though the world durum situation has continued to tighten, if we look at production in the U.S. and Canada combined, it’s up 30 percent over last year,” she added. “Our supplies in the North American region definitely got replenished with this year’s crop and that keeps buyers fairly comfortable with supplies for now.”

Another factor that’s pressuring prices, Olson noted, is that U.S. export sales haven’t been overly robust lately. Sales so far stand at 22 million bushels (MB), which is down from 26 MB a year ago at this time. The bulk of the demand has been from Italy, but the U.S. did see a sale recently to Tunisia of 772,000 bushels. The U.S. still hasn’t seen any sales to the North African countries of Algeria or Morocco, a region that had drought affected crops this year.

North of the border, Canadian export sales are up about 14 percent.

“We only have their destination data through October, but similar to the U.S., they’ve seen a big increase in sales to Italy, while their exports to Algeria are lower than last year,” Olson said. “But Canada has been seeing fairly strong demand from Morocco, which did have a drought-affected crop this year, and Canada also saw some sales to Tunisia.”

The latest WASDE report (World Agricultural Supply and Demand Estimate) numbers for durum included some very minor changes, which is quite normal for this time of year, Olson noted. In the report USDA did reduce projected U.S. imports by 3 MB, while ending stocks then declined by 3 MB down to 31 MB total. That would be the lowest ending stocks number in five years.

USDA left all the other numbers the same. Domestic food use is still projected at 90 MB, which is the highest in the last 20 years, and exports were left at 30 MB.

“One thing that affects durum this time of year is that the Great Lakes port is closed, usually through March, so obviously that limits our European sales and exports this time of year,” Olson said, adding that otherwise for durum, things have been pretty quiet.

Lastly, Olson pointed out that worldwide supplies have been getting tighter over the last five years or so. She said production and acreage prospects for next year will be closely watched.

“In the U.S., similar to spring wheat, there is a lot of price competition lately,” she said. “In the case of durum, that competition is coming from peas, lentils and oilseeds, so we’ll see how that affects planting prospects for 2021.”

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