U.S. buyers are putting on a brave face ahead of the U.S. harvest, with DTN's National Durum Index falling $.08 to $6.91 USD per bushel on Wednesday and remained steady on Thursday, the lowest level seen since June 2014. The index had reached a July high of $8.06/bu with prices largely holding near this level through the last half of July.
The National Durum Index seems destined to a test of long-term support between $6.60/bu and $7.00/bu, the range traded between August 2013 and June 2014.
Earlier in the week, the USDA rated North Dakota's durum crop at 83% Good to Excellent as of August 9, with current forecasts suggesting the state will produce 50% of the country's durum production. This is unchanged from the previous week and compares to the five-year average of 74.8% Good to Excellent. The crop is well ahead of average, with 80% turning color as compared to the five-year average of 49%.
Data reported for Montana rated that state's crop at 33% Good to Excellent, up 3% from the previous week, but well below the five-year average of 63% good to Excellent. Current projections indicate that Montana will produce 23.4% of the nation's durum production.
As seen on the attached graphic, durum production in the U.S. is forecast to reach 77 million bushels this year (2.096 million tons), a 45% increase from last year and just slightly higher than the 10-year average. Supplies are expected to increase by 19% to 143 mb (3.892 mmt) which is also 1.6% higher than the 10-year average.
The United States' imports of durum are expected to be lower this crop year, down 5 mb or 11% from 2014/15 to 40 mb or 1.089 mmt, which is 4.9% higher than the average of the previous 10 years and just slightly below the five-year average. Of course this will be a moving target and subject to change depending on the relative crop quality between the U.S. and Canada.
Export quotations release by Agriculture and Agri-Food Canada indicates export price firming $1.68/mt to $552.11/mt from St. Lawrence terminals as of August 7, close to the high of $553/mt reached the week of July 24 after 10 consecutive weekly increases after reaching a low of $396.30/mt in May. The most recent indication remains $5.38/mt above the four-week average.
Cliff Jamieson can be reached at firstname.lastname@example.org
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