Canada Markets

Challenges Faced by Durum Exporters

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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This chart shows the week 26 grade distribution (percent of total stocks) for terminal stocks of durum as reported by the Canadian Grain Commission for the 2016/17 crop year (blue bars), the 2015/16 crop year (grey bars) and the five-year average (brown bars). (DTN graphic by Scott R Kemper)

Marketing Canada's lower-quality durum crop will prove a challenge for sellers, although there are reports of numerous trains of low-quality stocks being shipped from western Saskatchewan to export position on the West Coast. This is good news, given the recent Canada report that estimated Dec. 31 stocks at 6.901 million metric tons, up a whopping 63.1% from the previous year and a record level for this date.

As of week 26, the mid-point of the crop year as of the week ending Jan. 29, Canadian Grain Statistics show crop-year exports from licensed facilities at 2.0219 mmt, down 13.4% (312,100 metric tons) from the same period last year and 11% (250,200 mt) below the five-year average for this period.

A quick look at terminal stocks shows signs of a shift in direction to facilitate movement of this crop. As of week 26 in the 2015/16 crop year, 61,600 mt of terminal stocks were reported in West Coast terminals, 11% of the total stocks, while an additional 99,100 mt was reported in-transit on western rail. Most recent 2016/17 week 26 data shows 119,000 mt in store west coast terminals, 26% of total stocks, with 145,900 mt reported in-transit western rail.

Cumulative exports as a percentage of expected crop-year exports do continue to lag past years despite a drop in AAFC's estimated export demand from as high as 5.3 mmt early in the crop year to the most recent revision to 4.5 mmt. As of week 26, licensed exports total 44.9% of the estimated 4.5 mmt export program, while in 2015/16, 51.4% of total exports had been reported at this time with the five-year average calculated at 50.2%.

A look at cumulative export data as of the end of December in the Canadian Grain Commission's Exports of Canadian Grain and Wheat Flour report shows nine countries who had been shipped durum in the August-through-December period of 2015/16, totaling 368,300 metric tons, who have no recorded exports this crop year. The largest is the country of Tunisia, having been shipped 184,200 mt in this period of 2015/16.

At the same time, this report shows exports to eight countries in 2016/17 who had no exports reported for the first five months of 2015/16, totaling 174,000 mt. Canada's top three customers as of this period have been shipped only slightly less volume than this time last year when combined. Exports to Italy are reported at 418,100 mt (559,900 mt), exports to Algeria total 348,800 mt (267,700 mt) and exports to Morocco total 217,300 mt (281,700 mt), with year-ago exports in brackets.

The attached chart shows the grade distribution of durum stocks held in terminal elevators as of week 26 compared to 2015/16 and the five-year average. Compared to average (blue bars compared to brown bars), current stocks of 1 CWAD as a percentage of total stocks are well-below average, stocks of 2 CWAD are above average and stocks of 3 CWAD are well-above average. The volume of lower grades held as a percentage of total stocks is just slightly higher than the five-year average at 28.7%.

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

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

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