For durum, the harvest situation really hasn’t gotten any better for producers as they’ve had to deal with rain throughout harvest, and now, over Oct. 10-12, snowfall has slowed things down even more.
“For producers it’s just a very difficult situation getting the crop off,” said Erica Olson, marketing specialist with the North Dakota Wheat Commission.
Similar to spring wheat, it’s tough to say how much durum is left to harvest. The last crop progress report in early October indicated 21 percent of the crop was left to harvest in North Dakota and 36 percent remaining in Montana.
“Some producers feel that there’s more than that out there, but it’s really tough to get a hard number,” she said. “At this point, a lot of those acres will be abandoned or zeroed out for insurance purposes because the quality downgrades are, obviously, very, very severe at this point and a lot of that would be feed wheat.”
Olson pointed out that prices for top quality durum have come up a little. Most locations are showing $6 and some getting up closer to $7, but again, that’s for top quality durum and “obviously that price is increasing because we don’t have a lot of that this year.”
The bids for low end quality durum that might have lower falling number issues or color issues, etc., have been between $2.60-$3.
North of the border in Canada, producers are facing a similar situation as their U.S. counterparts, as their most recent harvest report showed 40 percent of the crop left to harvest in Saskatchewan and about 10 percent in Alberta.
“If you combine both the U.S. and Canadian crops, they account for about 20 percent of world durum production” Olson said. “Those two countries account for a much larger portion of world durum exports, so declining quality is going to have an impact.
“Everyone is trying to figure out what percentage will be abandoned, what percent will be of feed quality,” she continued. “I think the majority of the durum left out there likely won’t be harvested,but how much exactly is that? 15 percent? 20 percent? For the crop that is harvested, a much larger portion than normal is feed grade. It’s going to take time for the market to figure out the situation.”
Olson noted there were a couple changes made to the world durum situation in the latest International Grains Council (IGC) report. The IGC did lower production again in Europe due to a decline in Italy, so that production number is now at 295 million bushels, which is a little lower than previously expected.
The world situation is getting tighter and supplies are listed at a 5-year low. Consumption is expected to be lower this year, but looking at the numbers, most of that is in the feed category.
“However, with the quality issues in the North American crop, that number may actually comeback up due to higher supplies of feed,” she said. “Either way, stocks are expected at a 5-year low and supplies of the top milling quality are projected lower. So the world situation for durum is getting tighter, especially when you consider quality, so we’ll see how that plays out in prices.”
There were also a couple changes in the durum numbers in the October World Agricultural Supply and Demand Estimate (WASDE) report. Olson noted the U.S. is expecting fewer durum imports this year so that projection dropped by 6 million bushels. At this time the production number is at 58 million bushels, but Olson thinks that will be lower because of the unharvested acres.
“I think our supply and demand situation will be tighter than what this report showed,” she said.
In the WASDE report ending stocks were lowered by 5 million bushels. That puts the new ending stocks estimate at 49 million, which is lower than last year, but still high historically speaking. Again, these numbers will likely be adjusted after unharvested acres are factored in and how that affects production.
The U.S. is still seeing a fairly good export sales pace. The export report earlier this month showed just 2 million bushels in U.S. durum sales, the bulk of which going to “an unknown destination,” which typically gets switched over to the country that imported it.
To date, U.S. durum sales total 18 million bushels compared to 10 million a year ago. The bulk of that increase is to Italy and also a chunk of that to unknown destinations.