Although durum prices have come down from their recent highs, they remain historically high following the 2021 harvest.
“Durum prices have been relatively stable of late with most bids in the $13.50-$14 range,” said Erica Olson, market development and research manager for the North Dakota Wheat Commission. “Occasionally, at a few locations, bids may come in a bit lower at $12.50-$13.
“Historically speaking, these are still great prices, but there is still some producer disappointment after we saw the price drop a few weeks ago when prices had peaked at $17.50.”
According to Olson, the big issue is that at these prices most buyers are only making purchases as needed. She noted that most end-users have fairly good coverage through the end of the calendar year and are not really interested in extending coverage by large amounts at these current high price levels.
On the flip side, durum supplies are very tight and producers are hesitant to sell, so this is still going to be an interesting situation.
“We’ll see what happens when they do need to start making some larger purchases,” she said.
USDA was expected to release its Small Grains Summary on Sept. 30.
The report, Olson noted, will better solidify the number of planted acres and also harvested acres and yield.
“The planted acreage is not likely to change substantially, but one number that’s going to be closely watched is the harvested acres for durum,” she said. “Obviously, with the drought we know some acres were not harvested, and up until this point USDA has been using a trend line of about 3 percent abandonment. Given the conditions, we know it’s higher this year, but we don’t know to what level. This could affect the production number, as well.”
The yield number will be updated, as well. Ahead of the report it was already projected fairly low at 22 bushels per acre for both Montana and North Dakota.
“If that yield number goes lower and/or the abandonment goes higher, obviously that’s going to bring production down, as well,” she said.
In mid-September, Stats Canada updated its Canadian durum production estimates, which were “a bit of a surprise.” Canadian durum production is now estimated at 129 million bushels (MB), almost 20 MB less than the previous estimate of 147 MB, which was already low. That represents a 46 percent decline on the year.
The International Grains Council (IGC) released its latest report during the third week of September. In the report, the IGC lowered the world durum production number again, which is now down to 1.17 billion bushels. That is due primarily to the reduction in Canada’s production estimate and also a slightly lower production estimate in Turkey, according to Olson.
“Not surprisingly, given the lower production and higher prices, consumption is expected to reach a 20-year low, with most of the decline being in the feed category,” she said.
“Trade, not surprisingly, is also forecast to decline this year due in part to high prices, but also because of higher production in Europe and North Africa, so demand there is expected to be lower,” she added.
World stocks were lowered in September down to 228 MB, which is down 23 percent from last year. Canadian stocks are expected to be two-thirds lower at the end of the year. Also, total stocks from major exporters are down about 40 percent this year.
Olson also talked about the decline in trade, which is being felt in U.S. export numbers. During the third week of September, the U.S. finally did see some fresh durum sales of just over 2 MB. Most of those bushels went to an unknown location and some to Italy. That puts total U.S. durum sales for the year at 4.7 MB, which is better than they were the week before, but still way off last year’s pace of 19 MB.
“We’re looking at a situation with supply levels very tight and buying has been slow,” Olson said. “I think it will be interesting to see how much buying takes place over these next couple months, but definitely as we get into the new year. There’s not going to be fresh supplies for a while, so this market is going to continue to be fairly volatile.”