Current Agriculture and Agri-Food Canada projections for durum exports in the 2016/17 crop year call for a carbon copy of 2015/16 results, with crop-year exports expected to fall a modest 0.9% from last year to 4.5 million metric tons, which includes unlicensed exports and the export of products. This comes following three cuts to the export projection after earlier estimates targeted a record 5.3 mmt earlier in the crop year. This is shown by the black line (2016/17 AAFC projection) closely tracking the green shaded area on the chart, which represents the 2015/16 pace of licensed exports.
As of week 32 data, covering the week ending March 12, actual exports (red line on the attached chart) is roughly 218,400 metric tons behind the cumulative pace needed to reach the target (red line as compared to the black line), which suggests plenty of time to catch up when the eastern seaway opens. A quick look at terminal stocks shows 328,000 mt in store terminal positions, which is a three-year low and below the five-year average for this week. Vancouver stocks are reported at 102,600 mt, 47% higher than the five-year average westbound in-transit stocks reported at 58,000 mt, almost double the volume reported the week prior.
A look at the cumulative export quality statistics shows the challenges in meeting the demand faced in previous years. So far this crop year, 21.8% of terminal exports have graded a No. 1 CWAD or No. 2 CWAD. This compares to 59.1% of the shipments falling in the two top grades in 2015/16, while the three-year average is 57%.
There are few bullish signals in the global market at present with AAFC's February report indicating global ending stocks expected to increase by 2.3 mmt to 11 mmt, which represents a bearish 28.6% of expected use. At the same time, the European Commission's weekly data shows durum stabilizing at St. Lawrence ports. Between March 1 and March 15, price steadied at $255/mt USD, down 6% from the previous year. Durum offers FOB the Port-la-Nouvelle in southern France increased 4 euros in the same period to EUR237, down 4% from the previous year, despite Euro strength against the U.S. dollar so far this month.
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