Cash prices reported by pdqinfo.ca for the southeast region of Saskatchewan shows the bid for No. 1 CWRS 13.5% rising by $16.89 per metric ton (mt) since Aug. 1, while the No. 1 CWAD 13% durum bid has fallen by $40.48/mt, to $400.34/mt, the lowest price reported since July 20, 2021. Earlier in August, the HRS bid reached its lowest level in close to a year.
The durum HRS spread for southeast Saskatchewan has fallen to $12.13/mt as of Aug. 30, which compares to $12.56/mt for southwest Saskatchewan and $3.41/mt for southern Alberta, according to pdqinfo data. The five-year average for southeast Saskatchewan for this date is $95.20/mt (durum over HRS) while the five-year average for the 2017-18 to 2021-22 crop years is $63.02/mt.
This week's Statistics Canada report can be viewed as bearish for durum, with 6.5 million metric tons forecast to be produced in 2022, based on July model data. In addition, the government included a prior year adjustment that saw 384,000 mt of production added to the 2021 crop. The Sept. 14 production estimate will be watched closely as it will include the hot and dry weather experience in the western Prairies in August.
Along with the uncertainty surrounding prairie production is missing demand signals, which are sure to come. This week's release of the Canadian Grain Commission's Export of Canadian Grain and Wheat Flour report shows Canada exported 334,700 mt to Italy in 2021-22, down 1.155 million metric tons (mmt) or 78% from the previous year. Meanwhile, European Union data shows only 30,671 mt have been imported from all sources in the first nine weeks of 2022-23, or as of Aug. 29, which is down 87% from the same period in 2021-22 and down 95% from the same period in 2020-21.
Argus Media has reported the EU's durum production is forecast to be the lowest in at least five years at 7.1 mmt, while exports are forecast to almost double from 1.3 mmt to 2.5 mmt in 2022-23.
While major buyers such as Italy will be turning to Canada, the prairie crop is not in the bin year and this situation bears watching.
Cliff Jamieson can be reached at firstname.lastname@example.org
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