It looks like the Canadian durum wheat carryout for 2017/18 is projected to be pretty big and similar to what it was a year ago.
So the better question to ask is, What did durum wheat prices do at this time a year ago?
It looks like the Canadian wheat carryout for 2017/18 is projected to be similar to that of a year ago.
So the better question to ask is, What did spring wheat prices do at this time a year ago?
Quite simply, if we’re looking at the heights of the Western Canadian wheat market in 2016/17, this is how it breaks down:
• Durum wheat prices performed best in January 2017
• Hard red spring wheat prices were starting to creep higher in May 2017 (some drought premium was likely getting priced in)
• CPS wheat was finding its top in May 2017 (similar to CWRS wheat, with some drought premium creeping in).
Yes, I could’ve shown you June and July and August prices but those values were much higher because of the drought premium that was fully priced into the market during those months.
Of course, we can make a bet that there’s going to be another dry year (heck, there’s not a ton of soil moisture out there).
However, consider the quality and size of this year’s crop compared to 2016/17, it’s worth looking at what 2016/17 prices were.
As it relates to durum wheat, we do know that there’s bit less overall quantity available in the North American these days, thanks to the smaller US harvest.
However, there seems to be plenty of decent quality out there, including some of the product that was carried over from last year.
Thus, with a lot of durum wheat still available, no one is willing to pay up for it
This is also known as supply and demand..
However, we continue to think there could be some better opportunities for durum wheat in the coming months.
If we’re looking at the chart below, we do see that the best prices in the first five months of 2017 were seen in January.
Again, the market did see some pick up over the summer months thanks to dryness concerns. Could that materialize again in 2018?
Yes, it’s certainly a possibility but I’m looking for an opportunity price out another 10% block in the next few weeks.
After all, luck is often defined as when the prepared meet opportunity.