Like a lot of other crops in the northern area of the U.S. this spring, durum planting is a little behind as it’s been challenging in some parts of the region.

“It’s obviously not historically delayed like some other years, but considering where the durum is planted and how dry that region has been this spring, I think there’s some expectations that our progress numbers would have been a little bit higher,” said Jim Peterson, marketing director for the North Dakota Wheat Commission. “Nonetheless, it’s just been a very cold April and early part of May and we’ve gotten some snow and rain. And we still have areas that are struggling with subsoil moisture from last fall and that is causing some issues getting into some of the fields.”

As of May 10, North Dakota producers had 28 percent of their durum planted. That is ahead of a year ago when only 20 percent was planted at that time, but it’s behind the five-year average of 33 percent.

“That is showing pretty good progress and it is much better than where spring wheat is in North Dakota. It was about a 15 percent gain from May 3 to May 10,” he said.

Montana producers were making better progress early on, but now they’ve slipped a little bit behind North Dakota and are only 26 percent planted, which is behind the 2019 pace of 29 percent and well behind the five-year average of 47 percent.

“Montana did deal with some snow and cold temperatures in some areas the week of May 3,” he said. “As we go forward, what’s obviously going to catch market attention is what happens with the rest of planting progress, since we are expected to plant less acres than many end-users were anticipating earlier in the year. We won’t get a re-surveyed planted acreage level until the end of June.

“A few more people are starting to talk that final North Dakota/Montana durum acres for 2020 will be slightly higher than what USDA estimated in March,” he continued. “It probably won’t have a big market impact simply because it likely will not be a significant shift, but nonetheless, there was increased interest in durum as April played out just with durum prices holding in more stable relative to the decline in spring wheat.”

Another issue Peterson pointed out is lower-end or so-called feed quality durum has held remarkably strong near the $4 range and that’s been pretty attractive to some of the producers who got hit with some of the quality issues last year.

As far as the U.S. market is concerned, Peterson said that mill demand continues to be very brisk as retail sales of pasta are still going very strong at the supermarkets. Even with some easing of stay-at-home policies across the U.S., he said there are enough states and larger metropolitan areas that still have that stay-at-home policy to help keep pasta demand up.

“Some supermarkets, depending on where you’re at in the country, are still only about two-thirds stocked with pasta products. That’s improving some as we progress through the month of May, but we’re still seeing very strong in-home use of pasta,” he said. “We’ll see as things go on and what that means for U.S. domestic mill demand and eventually prices to local elevators and to producers.”

Peterson explained there has been some spot filling of semolina needs by pasta plants for the May-June period. Prior to the coronavirus, a lot of pasta companies were fully covered for their expected needs for that period. So that does indicate the “stay-at-home” policies are changing some demand levels, that the industry is seeing a slight boost in pasta consumption.

“As we go forward, the thinking is the market will likely get progressively tighter as we go into next fall, especially if we have some kind of hiccup with harvest quality in the U.S. or Canada, or expanding drought conditions in some of the drier areas of Montana and western North Dakota, which could cut into yields, simply because ending stocks in both the U.S. and Canada are still projected fairly tight,” he said.

Stats Canada came out with its planting intentions report on May 7. To the surprise of a lot of the industry, the agency only showed about a 6 percent increase in durum plantings in 2020 vs. 2019. Many in the industry had been anticipating about a 15 percent increase.

“After the report, and with the widening spread of durum prices compared to spring wheat that’s happening in Canada, as well, a lot of analysts now are thinking that final Canadian durum acres will be higher than that initial survey, similar to the U.S.,” Peterson said. “How much remains to be seen. Nonetheless, even if they would slightly increase acres and have average to slightly above average yields, they’re still going to look at a tight balance sheet next year, as is the U.S.”

He pointed out that a lot of U.S. pasta companies, which are the big demand center for U.S. durum use, as well as a good share of Canadian durum use, are only about 20-30 percent covered for new crop position for August and beyond.

“At some point, if they start to feel prices are maybe going to escalate a little bit, we may see them step in and extend more coverage, and hopefully, that would provide some incentive for new crop durum prices,” he said, adding that local milling quality durum prices are now anywhere from $5.90 to $6.25. However, new crop durum is at $6 or below, so there’s really not much producer price incentive in the market at this time.

Factors that could help drive prices is how the European crop and North African crop develop over the next month or two. World durum production is projected about 5 percent higher by the International Grains Council and most of that is due to rebounds in Canadian production, as well as EU production and stable to slightly lower North African production.

“In parts of Europe they have had some extended dry periods which could hamper some of their final production, but obviously they’ve still got a period to go,” he said. “As we get into late-June we’ll have a better idea of what European durum harvest will be like, and in North Africa it’s quite dry in parts of Morocco, which would be a positive if they have a smaller local crop again next year.”

On the demand side, for the current marketing year U.S. durum sales were at 34.5 million bushels (MB) as of the end of April. USDA is still projecting a goal of 40 MB by the end of May, so there is still some work to do.

“We need to line up a few more customers for that tail-end of purchases,” Peterson said. “We still have about 3.3 MB left to ship, so I think right now that 40 million may seem a little optimistic. Maybe if we reach 35 million in actual shipments by the end of May that may be more realistic.”

On an optimistic note, the U.S. does have 8 MB of new crop sales on the books from after June 1 into the 2020-21 marketing year, which is a positive sign. Of that 8 MB, about 3 MB will go to Italy.

“I think the big key going forward is what happens in Italy with this significant impact they’ve had from COVID and tourism being the big driver of the Italian economy,” he said. “There’s still a lot of skepticism, at least in 2020, as to what level of tourism they can get back to. That’s obviously going to have an impact on pasta sales in country.

“I think from a supply standpoint, we’ve got some potentially pretty positive price developments. It’s the demand side that’s a little bit more uncertain in the U.S. market, as well. How long will pasta sales stay where they are? A lot of that is unknown right now depending on how the opening up of the country goes through the summer months,” he continued.

In its April report, the International Grains Council projected an increase in world durum trade next marketing year. The primary driver behind that is a slight increase to the U.S., as well as the North African region, according to Peterson.

“There could be some pretty good growth in Algeria, Morocco, and Tunisia based on smaller crops. Hopefully additional demand there will help offset EU declines, if there are any, in Italy,” he said.

“With that, we’ll see how the rest of planting goes through the month of May. I wouldn’t anticipate any delays to lead to cuts in durum acres like it’s going to with some parts of the region for spring wheat or corn, but it adds another challenge that producers are dealing with this year.”