Durum

The durum market has been on the lookout for some kind of good news to push prices in a positive direction, but so far that news has been elusive.

“There’s just no real positive news for the durum market at this time,” said Erica Olson, marketing director with the North Dakota Wheat Commission. “Durum prices remain disappointing. Most bids are around $4.50 with some as low as $4.25.”

Olson did note the higher end of the range would be $4.80 and a couple of the new crop bids have been around $4.75, so really no change there.

“Basically there’s just nothing that is able to move the market right now,” she said, adding that even USDA’s forecast for a big decline in acreage in the planting intentions report didn’t move the market.

USDA is projecting almost a 30 percent decline in durum acres for this year which was “a bit shocking to some.” One thing that is mitigating that concern is the high level of stocks the U.S. has on hand. At the beginning of March, the U.S. had almost 74 million bushels which is almost equal to last year’s production level.

One of the reasons for this is the fact that domestic demand has been slow. Still another big issue is the imports of Canadian durum.

“The last two years we’ve been at 20 million bushels plus of imports which is double or triple the previous years,” Olson said. “Those imports obviously add to our supply level which has been keeping prices down a bit.”

On the demand side export sales have actually been up from 2018. But while they are higher than last year, similar to the other classes it looks like they will fall short of USDA’s estimate of 25 million bushels. Current U.S. durum sales are at 18 million bushels which compares to 14 million last year.

“It’s very doubtful that we will reach USDA’s goal. We would have to see almost a million bushels of sales per week to get there,” Olson said, adding that USDA export projection is often on the high end.

“The good news is they are higher than last year and we’ve seen increased demand from Italy, Belgium, Nigeria, Guatemala and Panama,” she continued. “But we’ve seen less demand from Algeria this year. This is not unique to just us. In general, world demand is down 10 percent this year, and most of that is in North Africa.”

Canadian exports are down 7 percent so far this year. Their biggest declines have been in Algeria, Morocco and Italy.

In the latest WASDE report (World Agricultural Supply and Demand Estimate), USDA did make some adjustments in the durum supply and demand numbers. There was a slight decline in domestic use and the agency lowered exports by 5 million bushels, so the new U.S. ending stock estimate is now 55 million bushels which, if realized, would be the highest in over 25 years.

Another concern for the market and producers has been the cool, wet spring, including heavy snows in some areas April 10-12 which has delayed planting in large areas.

“Planting has not started yet, so it will be interesting to see the final acreage number. I don’t think we expect that to deviate much from March 29 projection,” she said.

The Canadian acreage report will be closely watched as well. There’s an expectation for a decline there as well but not as substantial as in the U.S.

“Just looking worldwide for production next year we’re anticipating a decline in many of the major production areas and we’re projecting stocks to tighten a little bit,” Olson said. “Now, will this eventually help prices? Hopefully, but only time will tell.”