Tight supply concerns have helped durum wheat prices in Western Canada stay strong and maintain a premium over spring wheat values.
“We have a projected very low Canadian carryout for durum; we’re sharply below the five- and 10-year averages,” said Jerry Klassen, manager of GAP Grains and Produits in Winnipeg. “Whereas, the spring wheat ending stocks are above the 10-year average.”
Statistics Canada pegged durum wheat stocks as of March 31 at 2.663 million tonnes. All wheat stocks, excluding durum, were at 10.797 million tonnes.
Some of the strength in durum was also linked to a lack of significant farmer selling, and expectations that they will continue to be slow sellers during the next couple of months.
Klassen noted that durum farmers won’t likely sell anything once they’re busy with field work, unless the price reaches the $8.50 per bushel level.
According to Prairie Ag Hotwire, western Canadian durum prices were around $8-$8.30 per bushel as of May 9, while Canadian Western red spring (CWRS) prices were $7.25-$8.01 a bushel.
The Canadian wheat market will probably stay firm over the next couple of months, but prices won’t likely go up because the harvest of the European durum crop is set to begin in June, Klassen said.
“The world market for durum is really under pressure as new-crop European supplies come off,” he said. “And, the demand is also very sluggish.”
What happens with prices in Canada going forward will depend heavily on the yield potential for the crop, because the carryout stocks are so tight and acreage is expected to be average.
Statistics Canada’s acreage intentions as of March 31 show Canadian farmers plan on seeding 5.105 million acres of durum in 2013-14, up from the 4.68 million acres planted in 2012-13.
Yields for durum can range anywhere from 20 to 39 bushels per acre, said Klassen, and if the weather is dry the crop doesn’t fare as well.
“It looks like the crop is going to get off to a good start, which is optimistic, but it’s going to depend on the weather after that,” he said.
— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.