Week 17 durum exports through licensed elevators and reported by the Canadian Grain Commission were reported at just 1,100 metric tons, down sharply from the 80,300 mt shipped in the previous week and the 92,000 mt needed this week in order to remain on track to achieve the current AAFC export target of 4.3 million metric tons.
Cumulative exports as of this week, or the week ended Nov. 25, are reported at 1.0093 mmt, which is 22.5% below the volume reported for the same week in 2017-18 and 29.2% below the five-year average for this week. Given the five-year average historical pace of movement, an average of 30% of total crop-year exports are achieved by week 17, while this average pace would project to crop year exports of 3.364 mmt, close to 1 million tons below the current AAFC forecast. The slowest pace of movement over the past five years, seen in 2016-17 when 25.8% of total crop-year exports were reported as of week 17, projects to potential exports of 3.9 mmt, still 400,000 mt short of the current projection.
On Thursday, we will see if Statistics Canada will add a further bearish twist to the current supply-and-demand balance. Media reports point to a range of pre-report production estimates from 5.4 mmt to 6.178 mmt ahead of Thursday's report, which compares to the 5.706 mmt estimated in September. Over the past five years, the average final production estimate (including potential revisions) is 626,200 mt or an average of 12.2% higher than the September production estimates. The tendency is for the durum crop to grow larger on paper, even in 2017 when drought was faced in the southern growing areas.
Rail bids into U.S. mills continue to face pressure. This week, a rail bids for Chicago-beyond No. 1 HAD 85 HVAC was shown at $6.20 per bushel (bu) USD for December/January delivery, down $0.05 to down $0.45 since a report on Nov. 21. PDQinfo.ca reports that southern Saskatchewan producer bids have fallen from a high of $255/mt in late August to a range from $213.42 to $220.32/mt on Dec. 4. AAFC has estimated that producer prices will average $220-$250/mt for the 2018-19 crop year in their latest supply and demand tables. But with eight months left in the crop year, this estimate could face further downward pressure.
Cliff Jamieson can be reached at email@example.com
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