Durum

As harvest is fast approaching, the durum market has remained fairly steady and quiet.

“It’s been pretty quiet in the market as producers get ready for harvest and buyers seem pretty content with supplies right now,” said Erica Olson, marketing specialist for the North Dakota Wheat Commission, adding that cash bids for durum are still at the $6 level, although some have fallen slightly below that.

Durum harvest has not started in North Dakota, although it’s close in some areas. On Aug. 3, USDA’s crop progress report showed that 70 percent of North Dakota’s durum had started to turn color, which is ahead of average, and about 12 percent is mature.

In southwestern North Dakota, Olson expects there to be some harvest action there soon.

Montana is a bit further behind in crop development with about half turning color.

“A positive is that condition ratings for both states have been trending up,” she said. “I think we’re likely seeing some of the positive effects of the moisture we started seeing in the last few weeks and that’s helped the crop along.”

According to the most recent crop progress report, in North Dakota 71 percent of the durum crop is rated in good-to-excellent condition and in Montana 64 percent is rated good-to-excellent.

Olson noted that in visiting with producers, many are seeing a wide variance in crop condition and yield potential.

“Some of the earlier-planted crop was stressed a bit more from dry conditions earlier in the growing season. However, the recent moisture did help to stabilize the crop. More will be known once producers get further into harvest,” she said.

On the demand side, domestic demand has been holding fairly steady, though not as high as in the March to May period when many states were in lockdown due to the coronavirus and there was more cooking at home. Still, domestic demand has remained fairly strong. Most pasta manufacturers have been buying supplies as needed and they haven’t noticed any real urgency in the market at this time, according to Olson.

Export demand has also been fairly good with about 14 million bushels (MB) in sales this year, which is 1 MB higher than a year ago.

“USDA is forecasting that durum exports will be down this year, so we’ll see how that trend continues,” Olson said. “Part of the reason that our number is high this year is that some of that was carryover sales from last year that didn’t get shipped out until this marketing year, so they’re not necessarily new sales.”

Not surprisingly, she noted, the bulk of the exports have been to Italy. Sales there are double what they were a year ago. However, the U.S. has not yet seen any sales to North Africa this marketing year where a big production decline is expected.

“Production there is down quite a bit, so hopefully we’ll see some demand from that region,” she said, adding that production in North Africa is estimated to be down 21 percent across the region due to dry conditions there. “Thus, increased demand is expected to come from that region.”

Looking at the world durum situation, overall production is forecast to be up this year, but because of some of the production issues in some durum producing regions, including North Africa, there’s also likely going to be some demand shift. World durum production is estimated at 1.26 billion bushels, which is up 2 percent from last year. However, usage is expected to be higher, as well, therefore ending stocks are expected to decline.

For this year ending stocks are expected to reach a 6-year low of 282 MB.

European durum production is also down slightly this year.

On the flip side, Olson explained that Canada recently raised its durum production estimate to 220 MB. Based off their provincial crop report, it looks like most of their durum is rated in good-to-excellent condition. Harvest is estimated to be still two weeks away.

“Other than that, news-wise for durum things have been fairly quiet. I think most people are waiting for harvest to get underway so they can see what the crop looks like and we’ll see where demand goes from there, as well,” she concluded.