CNS Canada — Quality issues with the Canadian durum crop currently being harvested should see the price spreads between top- and low-end grain widen considerably, especially as the carryout from the previous year is also poor quality.
Canadian durum stocks, as of July 31, were pegged at 1.1 million tonnes by Statistics Canada in a report released Wednesday. That was above trade guesses and up slightly from the 956,000 tonnes carried over the previous year, but still below the five-year average.
“The direct off-farm movement to the U.S. was sharply below year-ago levels,” said Jerry Klassen, manager of the Canadian office of Swiss-based GAP SA Grains and Products in Winnipeg.
However, he said, overall durum stocks in Canada were still relatively tight, with the old-crop supplies all of low quality.
“It puts more emphasis on this year’s crop size and quality,” said Klassen, adding it will support prices for higher-quality No. 1 and No. 2 milling grades of durum.
While harvest reports are still coming in, “the quality situation on durum is quite severe,” according to Klassen.
High levels of fusarium and vomitoxin were already leading to discounts on lower-grade crops, he said, as commercials don’t want the diseased stocks in the system.
“It’s going to get large,” said Klassen on the price spread between top- and low-end durum bids.
Spot durum bids in Saskatchewan currently range from about $6.17 to C$7.20 per bushel, according to Prairie Ag Hotwire data.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.