CNS Canada — North American durum prices are teetering on an edge and could tip higher or lower as the balance between producer selling and demand fluctuates, one U.S. analyst says.
Canada’s production came in lower than expected due to drought during the growing season, which propped up durum prices, despite wheat’s global supply glut.
While not the lowest it has ever been, this year’s production falls short when compared to 2014, when Prairie provinces grew 5,192,700 tonnes of durum wheat. This year’s production is estimated at 4,743,700 tonnes.
“Whether prices hold through the winter, only time will tell,” said Jim Peterson, marketing director at the North Dakota Wheat Commission.
Better-than-expected world demand in the first half of the year boosted durum prices despite harvest pressure, he added.
“Durum has a bit more of a tightness factor going for it, compared with bread wheat.”
But that’s not to say prices won’t slip from current levels, Peterson said, especially as demand has tapered off.
Sales to North Africa have been slowing, which has been a challenge for the durum market, he said.
Europe has also had better production this year than last, so its import needs aren’t as strong.
If producer sales in Canada or the U.S. ramp up, then prices will scale back.
It hasn’t been a problem so far, Peterson said, as demand has been sufficient to keep prices stable — but it has been petering off in recent months.
“Right now that’s just not there, and I think that’s probably somewhat of a caution for prices right now.”
Saskatchewan’s delivered elevator durum prices range from $8.37 to $8.71 a bushel, and Alberta’s range from $8.86 to $9.02 a bushel. Both provinces’ prices sit between this year’s low and high of $6.01 and $10.86 for Saskatchewan, according to Prairie Ag Hotwire. Alberta’s low and high are $6.17 and $11.05.
U.S. prices are also sitting at an average, at about US$6.75, according to Peterson.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.