As of week 31, or the week ended March 8, Canada's durum exports totaled 2.8512 million metric tons (mmt), up 41.3% from the same period in 2018-19 and 9.2% higher than the five-year average. This is the fastest pace of movement realized in five years, with a higher volume of 3.240 mmt shipped in the same period of 2014-15.
As seen on the attached chart, Canada's cumulative durum exports (upward-sloping green line) continues to hold above the black line, or the steady pace needed to reach AAFC's current export forecast of 4.8 mmt.
When the seasonal pace of shipments is considered, an average of 56.3% of total crop-year exports has been achieved as of the week 31 licensed exports reported over the past five years. This average pace of movement would project forward to 5 mmt of exports for the crop year, or 200,000 metric tons (mt) higher than the current forecast. Over the past five years, the smallest percentage of crop-year exports realized as of week 31 was seen in 2018-19, when only 44.6% of crop-year exports was reported. This pace would project forward to an even higher export forecast.
Given the most recent estimates of crop-year supplies, the current forecast leads to a 900,000 mt carryout as of July 31, down 50% year over year. This is already the tightest stocks seen since 2007-08, while a higher pace of movement could rival the 757,000 mt carried out of 1997-98 and even be the lowest since 554,000 mt were carried out of 1985-86.
The pace of movement of durum and the crop's price spread relative to spring wheat is a supportive feature behind AAFC's forecast for 15% surge in prairie acres. On Thursday, the spread between DTN's National Durum Index and National Spring Wheat Index was $1.29/bushel USD (durum over spring wheat). This is the first time in three years that durum has traded above spring wheat on this date, with the three-year average calculated at a $0.06/bu premium (durum over spring wheat).
The current spread has been in a short-term uptrend since December, while approaching the November high of $1.45 USD, the widest spread (or largest premium) seen since August 2017.
Cliff Jamieson can be reached at email@example.com
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