European quality issues support Prairie durum bids

CNS Canada — Durum bids in Western Canada are showing strength relative to other wheat classes, with premiums for higher-quality supplies expected to remain in place or widen as the industry awaits Canada’s crop.

Canada’s 2014-15 durum crop is estimated at 4.9 million tonnes by Statistics Canada, which compares with 6.5 million the previous year.

The smaller production is somewhat supportive for prices. However, rather than tight supplies or increased demand, Ron Cote, a farm marketing rep with South West Terminal (SWT), said most of the strength in durum was tied to “quality.”

He said durum crops in Europe had relatively decent yields, but untimely rains had hurt the quality there.

As a result, Canadian durum hitting the top two grades should command a premium this year. However, he said it was still hard to tell if that will mean increased prices for the top grades, or larger discounts on poorer-quality durum.

The quality of Canada’s own durum crop is still up in the air with the harvest at least 10 days away, Cote said. SWT is about 10 km east of Gull Lake, Sask., in the heart of Saskatchewan’s durum growing region.

The durum crop, he said, will need warm, dry weather over the next few weeks.

Recent rainfall across the durum growing region has slowed the rate of maturity, but has not hurt quality. “If this rain was two weeks later, it would have caused some issues,” Cote added, but said the crop was still fairly green and looking good overall.

Spot bids for durum can currently be found at as high as $7.46 per bushel in Saskatchewan, according to Prairie Ag Hotwire data. That compares with Canada Western Red Spring (CWRS) bids as high as C$5.74 per bushel in the province.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

 

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