CNS Canada –– Canadian durum prices are being pressured by heavy producer deliveries, according to one analyst, while demand is lagging last year’s pace.
The durum market is being weighed on by larger-than-expected producer deliveries throughout January, said Jerry Klassen, manager of the Canadian office for Swiss-based grain trader GAP SA Grains and Produits.
“I think the million-dollar question is ‘At what price does the farmer start to slow down on his sales?'”
One reason for increased selling is volatility in the Canadian dollar.
“The weaker Canadian dollar has been supportive to the cash market, but the world market appears to be softening,” Klassen said.
The durum market also has a soft tone due to slightly larger carryout for major exporters, and similar production expectations next year in the U.S., Canada and Europe, Klassen added.
Despite heightened farmer selling, Canadian durum exports are behind last year’s pace, at 2.1 million tonnes as of Jan. 17 compared with 2.6 million tonnes in the same time frame a year prior, according to Canadian Grain Statistics Weekly.
“Canadian durum exports are lagging last year, sharply,” Klassen said.
Looking forward, analysts are watching North African tenders for price indications.
Dryness in North Africa is providing some psychological support, Klassen said, but that could be limited.
While the region will likely put out tenders for more durum throughout February, the idea is that they will be weaker than in January.
“Over the last four tenders each one is a bit lower. It seems like companies are getting a bit more aggressive on each subsequent tender.”
Delivered elevator durum in Saskatchewan will bring producers about $7.88-$8.82 per bushel, and about $8.34-$8.83 in Alberta, according to Prairie Ag Hotwire.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.