Canada Markets

The pace of Canada's durum exports shows that something has to give, based on the most recent government estimates. Week 18 exports, covering activity for the week ending Dec. 5, were reported at 51,400 metric tons (mt), the largest volume shipped in three weeks and only slightly below the 58,000 mt needed this week to stay on the steady pace to reach the November AAFC export forecast of 3.1 million metric tons.

Cumulative exports of durum through licensed channels total 1.1198 million metric tons (mmt) after 18 weeks, down 42.6% from the same period in 2020-21, but still ahead of the steady pace needed to reach the latest export forecast, which is down 46.3% from the volume exported in 2020-21. However, the most recent November Agriculture and Agri-Food Canada forecast does not include Statistics Canada's (AAFC) latest production estimate that saw a 891,100-mt lower revision in production to 2.654 mmt.

When AAFC's November forecast is adjusted to account for the lower production estimate, we see that total estimated supplies of 3.431 mmt for 2021-22 are lower than AAFC's November forecast for total demand of 3.872 mmt, consisting of 3.1 mmt of exports, 190,000 mt of industrial use and 358,000 mt of feed use.

Week 18 commercial stocks are reported at 785,800 mt, up 9.9% from the same week last crop year and 5.4% higher than the three-year average. This volume is close to evenly split between terminals from Thunder Bay and points east and prairie elevators.

Another signal that has shown no sense of panic despite the slashed production estimate on Dec. 3 is price. PDQinfo.ca's price for southwestern Saskatchewan has ranged from $718.85/mt to $723.62/mt between Nov. 23 and Dec. 10 or the past 14 sessions, while ending Dec. 10 at $720.56/mt, just below the middle of the range. On Dec. 3, the day of the report, the average price reported for this region increased by $0.15/mt, a non-event in the eyes of buyers.

Pasta products on the store shelves also seem steady in price and have even been featured as sale items in recent weeks.

This bears watching, but it does seem like this month's downward revision was overstated and we may look for a correction in the future.

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

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