A combination of growing global demand along with Canadian dollar weakness continues to boost prairie durum prices and bears watching.
Agriculture and Agri-Food Canada's March supply and demand report states that the global stocks use will fall from approximately 26.4% in 2018-19 to 19.8% in 2019-20, with ending stocks forecast at the lowest level seen since 2012-13. That was before the reports of panic buying of food products has gripped the market.
Businessrecorder.com reports that Tunisia purchased 75,000 metric tons of durum on April 1. Two of the three 25,000 mt shipments were sold by Glencore and could prove to be Canadian supplies. One shipment was priced at $338.50/mt USD, while the two Glencore shipments were noted at an average of $342.65/mt USD. Tunisia's March 17 purchase was reported at $326/mt, or $15.26/mt lower on average.
At the same time, Bloomberg has recently reported that Morocco is facing the prospects of a "dismal" harvest following what it called the worst drought in decades, while Tunisia and Algeria are facing similar challenges.
This week, a USDA attache report estimated Tunisia's wheat production for 2020-21 at 900,000 mt, down 554,000 mt or 38% from 2019-20, with 87% of this volume or 484,000 mt being durum. The USDA has forecast imports to increase 34% in the crop year ahead to 2.2 mmt.
CGC data shows that Canada has shipped 72,800 mt of durum to Algeria as of February, while the three-year average totals 1.130 million metric tons for the crop year, based on CGC statistics. Shipments to Morocco are reported at 430,000 mt as of February, while the three-year average is 763,000 mt for the crop year. Movement to Tunisia, is reported at 107,300 mt as of February, while an average of 100,700 mt has been shipped on average over the past three crop years.
Given the challenges faced in this region, Canadian supplies will be in demand. This comes at a time, when rational or not, consumers from China to Europe to North America are overbuying food products and hoarding.
Also this week, the USDA estimates U.S. durum acres will fall by 4% to 1.29 million acres, while France has reported its durum crop condition to fall from 66% to 64% good-to-excellent over the past week.
As seen on the attached chart, producer bids for No. 1 CWAD 13% protein across southern Alberta have jumped $19.80/mt to $292.19/mt from March 1 through Aril 2. This time period saw a $22.50/mt increase in southwest Saskatchewan to $285.82/mt and a $23.88/mt increase in southeast Saskatchewan to $299.48/mt. These same bids closed modestly lower on April 3.
A favorite line from a durum miller, when you are calling the durum buyer, the price is going down, but when they are calling you, durum is headed higher.
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