Canada Markets

A Look at the Prairie Durum-Spring Wheat Spread

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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This chart shows the durum/spring wheat spread for the 2019-20 crop year for southwest Saskatchewan based on cash price data. While down from the April high, the July 23 spread of $52.96/mt falls in the top 25% of the crop year range and close to its highest level in years. (DTN graphic by Cliff Jamieson)

Another reminder of the bearishness of the global wheat market was seen in the July 23 International Grains Council estimates for the 2020-21 crop year. While the production estimate was revised 6 million metric tons lower in July to 762 mmt, ending stocks were only revised 2 mmt lower and remain at a record 288 mmt. Such a volume would be up 12 mmt from 2019-20, while representing 38.4% of global use.

Earlier in the month, the USDA revised estimates in the same direction, although global stocks for 2020-21 are estimated at a record 314.84 mmt, up 17.72 mmt year-over-year.

As durum data gets lumped into the global all-wheat data, the situation is very unlike that of wheat when durum is excluded. In Agriculture and Agri-Food Canada's July Canada: Outlook for Principal Field Crops report, the agency quotes International Grains Council data that shows global production of durum increasing by 400,000 metric tons to 34 mmt in 2020-21, while global ending stocks were forecast to fall by 1.2 mmt to 6.5 mmt, or the lowest reported since 2007-08.

IGC tweets following this week's July IGC report shows an upward revision of 200,000 mt in production to 34.2 mmt, which remains 6% below the five-year average. A world production chart shows the forecast for 2020-21 to be the second-smallest in six years, only slightly higher than the 33.6 mmt estimated for 2019-20. IGC data shown on Twitter shows a 1.2 mmt upward revision in ending stocks, which would result in stocks unchanged from the 7.7 mmt in 2019-20, but still historically tight.

The attached chart shows the durum/spring wheat cash price spread for southwest Saskatchewan. Over the 2019/20 crop year, this particular spread traded as weak as $16.14/mt in early August (durum over spring wheat) to as high as $63.27/mt on April 17. Since late March, this spread has traded sideways while in a range spanning $18.89/mt. The July 23 close of $52.96/mt falls closer to the upper end of this range, while just $10.31/mt below the crop year high.

While not shown, a longer-term view of data that includes the 2016-17 through 2019-20 crop years would indicate that the current spread is relatively close to the widest shown since January 2017, when it was reported at $64.10/mt. This level was reached soon after the spread reached $90.82/mt in November 2016.

While prairie crops are looking good and AAFC is forecasting a year-over-year increase in durum exports and ending stocks, this spread may continue to trade sideways, although it does bear watching as a potential warning of growing concerns in the global market.

Cliff Jamieson can be reached at

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