Current Sales Position:
We are 0% sold for 2018/19 old crop durum wheat.
We are 0% sold for 2019/20 new crop durum wheat.
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Last week we discussed how the slow pace of Canadian durum exports has negatively added o ending stocks and it certainly has had an impact on durum prices
However, this certainly has ramifications for 2019/20 opportunities.It’s widely expected that there will not only be les durum planed in Canada next spring, but also the U.S. Instead, it’s expected that more spring wheat, barley, oats, and canola will find a big role in the rotation in 2019.
We might see other major players like France and Italy even pull back their production numbers. Globally, we know that Algeria, Canada, and the U.S. produced more durum in 2018/19, while smaller crops were seen in the EU, Mexico, and Syria. Total worldwide supply for the 2018/19 crop year has been revised by the International Grains Commission to 47 MMT, whereas demand is up 600,000 MT year-over-year to 37.8 MMT.
This puts global durum carryout at 9.8 MMT, a multi-year high.
Where Does This Leave Durum Prices?
Spot durum prices across the Canadian Prairies dipped a bit this past week, but are still sitting higher than where they were a month ago.
If we start looking at deferred pricing opportunities, we really need to go out all the way to June before we start seeing some premiums appear.
Is this our only legitimate pricing option? Unfortunately, it appears to be true. If I am not tight on cashflow, and I have some high quality durum, the play that I’m looking to do is lock in some delivery for this early summer timeframe. Maybe 25% of 2018/19 production is all.
However, if I am tight on cashflow, I’m looking to move some product sooner than later. This means that I need to aggressively shop this product between the feed market and the milling market. We have over 150 credit-verified buyers on FarmLead looking for either of the two qualities so I would strongly suggest posting it on the Marketplace. Any of these buyers will be looking for specs/quality so make sure to be transparent with the quality your moving and even if it is decent quality, we need to use logic and cashflow needs as our compass, not emotion (as hard as this might be).
Durum Exports This Week
Through Week 16 of the 2018/19 crop year (ending November 18), Canadian durum exports are sitting at a total of 996,500 MT, down nearly 16% year-over-year.
For Week 16 specifically, durum exports totalled 80,300 MT.
This is a decent trend, but given durum prices and where they’re at, this uptick in durum exports doesn’t seem to be moving the needle on the price compass too much. That being said, this week or next week, I’ll be looking to contract that first 25% of 2018/19 sales.
FarmLead – North America’s Grain Marketplace
Nov. 18 – Slow Durum Exports Adding to Carryout
Nov. 13 – Quiet Durum Wheat Week But Prices Inch Higher
Oct. 21 – Durum Exports to Blame for Poor Prices?