CHS buying Canadian durum

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The largest U.S. grain co-operative, CHS Inc., is buying Canadian durum and looks to bulk up on other crops there to seize the “phenomenal” opportunity left by the end of the Canadian Wheat Board marketing monopoly later this year, a CHS executive told Reuters on Monday.

In mid-December, a federal bill became law that will end on Aug. 1 the CWB’s monopoly to market Prairie wheat and barley for milling or export. Canadian grain handlers such as Viterra, Cargill and Richardson International quickly began signing contracts with farmers to buy grain for delivery after the monopoly ends.

St. Paul, Minn.-based CHS has so far bought a modest 65,000 to 70,000 tonnes of 2012 durum wheat from Prairie grain handlers, who will eventually move it to CHS elevators in the U.S., Tom DeSmet, vice president of marketing for CHS, said in an interview. CHS resells the grain to end users, such as grain millers.

Canada is the biggest exporter of spring wheat, durum, canola and oats. The Wheat Board’s monopoly has been in place for 69 years.

“This is phenomenal. (Ending the monopoly) is huge to the world,” DeSmet said on the sidelines of the Wild Oats Grainworld conference in Winnipeg. “The durum world, the grain world, has got their eyes on Canada big-time.”

Grain buyers, such as millers, are worried about ensuring they can maintain supplies after the board loses its monopoly and are giving CHS flexibility in filling orders, he said.

“The people we work with are giving us options. ‘I’ll take Canadian (grain) at this price, U.S. at this price, you supply it.’ And I think the reason they’re doing it is they’re very concerned and want to give us the flexibility to make sure they get the product.”