Durum

Cool, wet weather slowed the start to planting this spring, but durum producers have been able to make up some ground in mid-May. Unfortunately, the same can’t be said for prices which have remained stagnant.

“The good news is that producers are making some planting progress,” said Erica Olson, marketing specialist with the North Dakota Wheat Commission. “The bad news is that prices are still pretty lackluster. Old crop cash bids are still around $4.50 up to $4.65 and new crop bids are around $4.75 with some closer to $5. Obviously there’s nothing overly attractive about those prices.

“Looking back at price trends, cash prices have pretty much been stagnant since last October,” she continued. “These are price levels that we haven’t seen since 2010.”

But back to the more positive news. Olson noted that the weather has been improving since the first week in May with warmer and drier conditions. That has allowed for better field work progress as well as planting.

The recent USDA crop progress report for North Dakota on May 13 indicated about 25 percent of the durum crop has been planted. That’s up from only 7 percent the previous week and similar to where planting progress was a year ago. However, it is behind the longer term average of 35 percent.

In Montana about a third of the durum crop is planted. That’s slightly higher than North Dakota, but lower than the 50 percent average in the state.

The weather for the week of May 13-17 looks favorable, but there are chances of precipitation toward the weekend.

“So hopefully they’ll get more of that durum in the ground this week,” she said.

Looking at Canadian planting progress, in Saskatchewan, general planting is in line with the average. As of May 10 producers there had 17 percent of the durum crop planted. In Alberta planting was slightly ahead of average with 60 percent planted.

Looking at additional Canadian numbers, Stats Canada released it stocks report recently which showed that durum stocks as of March 31 are 18 percent higher than a year ago. That’s primarily due to their higher production in 2018.

USDA released its May WASDE report (World Agricultural Supply and Demand Estimate) on May 10 which, unfortunately, really didn’t bring any helpful news for durum, according to Olson. USDA lowered domestic use by 1 million bushels down to 86 million. Exports were lowered by 5 million bushels to 20 million, and ending stocks continued to climb higher and are now at 61 million bushels.

Regarding the adjustments, Olson said the export number is not surprising.

“That needed to be lowered,” she said. “Our export pace was never really on track to reach that higher 25 million goal. Right now we have sales of 18.6 million bushels versus 15 million a year ago.”

In the last sales report the U.S. did have larger sales to Italy and Algeria that totaled about 1.7 million bushels.

“Looking at the ending stocks number that’s now at 61 million bushels, there’s no easy way to say this, but it is potentially the highest ending stocks level in about 30 years,” Olson said. “Part of that is due to the higher Canadian imports we’re seeing and also just the slow demand.

“I know I’ve said it before, but those higher ending stocks just continue to put pressure on prices because there is no concerns from buyers about supplies,” she continued, “and it’s not just in the U.S., the Canadian stocks are higher and overall world durum stocks are higher this year.”

However, one important factor to remember is that durum is a smaller class of wheat and accounts for only 5 percent of the total world wheat production.

“The point is the supply and demand dynamics can change rapidly with just one or two production issues,” she said. “We already are expecting lower durum production next year and lower ending stocks. There are some areas that are concerned with dry conditions and planting delays and this could potentially start to whittle away some of those supplies.”