Canada Markets

Using PDQinfo.ca's data, the bids reported for the southeast area of Saskatchewan for No. 1 CWAD durum 13% protein has retraced 52% of the uptrend from the Aug. 5, 2019, low of $234.58/metric ton (mt) to the May 15 high of $302.63/mt, while ending last week at $267.20/mt.

With harvest of durum on the Southern Prairies nearing an end, Canada's durum exports as of week six, or the week-ending Sept. 13, are reported at 370,500 mt, down 39.4% from the same period last year, while 6.3% below the five-year average for this period. Over the past five crop years, an average of 8.4% of annual durum exports were shipped over this six-week period, a pace that would project forward to 4.4 million metric tons (mmt) of total exports in 2020-21, which is well-below AAFC's current forecast of 5.3 mmt released in their August forecast.

Canada has had a good run in terms of movement over the past crop year, but challenges remain ahead. One example is seen in European imports. Over the past 12 weeks of the European Union crop year, the EU reports durum imports up 97% from the previous crop year to 668,700 mt, of which 72% has been supplied by Canada. Note that roughly 50% of these 12 weeks falls into Canada's 2019-20 crop year. The CGC export data shows 1.518 mmt of Canadian durum moved into Europe in 2019-20, up 105% from the previous year, while 82% of this volume was shipped to Italy.

At the same time, the Grain Central website from Australia notes that, while key growing areas of that country have not shipped durum since early 2018, they have most recently sold 120,000 to 130,000 mt of durum into Italy for movement at the start of the shipping season in January and February. We can only watch as the Australian crop advances ahead of harvest for further signs of yield and quality.

The chart with this blog entry shows that the spot bid for durum in southwest Saskatchewan has retraced 52% of the uptrend seen in 2019-20 to a recent low of $267.08/mt over the past week. Prices are attempting to stabilize across most of the 2020-21 crop year in the November through May period with a lack of carry providing little incentive to store grain.

This bears watching.

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

Follow him on Twitter @Cliff Jamieson

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