Canada Markets

Durum bids remain under pressure as indicated by the trend in DTN's National Durum Index, as seen on the attached chart, with the most recent weekly close at $9.55 per bushel, down from the November high of $12.94/bu. This is despite a global crop of 32.3 million metric tonnes, as estimated by the International Grains Council, which would be the smallest crop in 13 years.

The smaller crop, combined with quality issues found in several of the global durum crops, including in Canada, resulted in a sharp rally over this year. There were also ongoing concerns raised that it was only a matter of time before users found ways to meet their needs with lower quality product. This is evident in the most recent Grain Commission export data which suggests that up to the end of week 20 or Dec. 21, 40.9% of all durum exports fell in the top two grades. This compares to final 2013/14 data which shows that 72% of all shipments were in the top two grades.

At the same time, Canada's exports are 554,000 mt ahead of last year at 2.258 mmt as of week 20, almost one-third higher than year-ago volumes. This is well ahead of the cumulative volume needed to achieve the 4.9 mmt export target set by AAFC. The November edition of the CGC's Exports of Canadian Grain and Wheat Flour report indicates the largest year-over-year volume increases taking place in Algeria, up 310% to 306,100 metric tonnes as of the end of November; Italy, up 125% to 619,600 mt; and Belgium where volumes have increased 176% to 261,600 mt.

Despite the most recent December USDA report which boosted U.S. imports of durum to 1.77 mmt from the 1.2 mmt reported for 2013/14 and comments made that these imports would come from Canada, exports to that country have seen a slow start. Crop year to date through the end of November, 78,000 mt have been shipped through licensed facilities according to CGC data, down 53% from year-ago levels.

Accessible internet bids indicate prairie durum prices ranging from the low $9 level up to $9.60/bu.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

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