Canada: Big durum crop likely to close door on price rally
Durum prices are unlikely to rally despite strong demand for the product, say a couple of grain industry observers.
“It’s going to be a grind in the durum market,” said MarketsFarm analyst Bruce Burnett.
Canada’s big crop is weighing down the market. Farmers produced an estimated 6.03 million tonnes of durum in 2024, a 48 per cent improvement over last year, according to Statistics Canada.
“Overall, the quality is pretty good on durum, (but) not stellar like it was last year,” he said.
There were also bigger crops in other exporting nations like Turkey and the United States.
In a recent Wheat Market Outlook published by the Saskatchewan Wheat Development Commission, Mercantile Consulting Venture estimated that durum production in the major exporting nations will be around 22.7 million tonnes, or three million tonnes more than last year.
By contrast, production in the top importing nations of Morocco, Algeria, Tunisia and Italy dropped by about 500,000 tonnes.
“The durum market will be better supplied this year and there will be strong competition in the export market,” said Mercantile.
“Selling opportunities should be considered.”
Burnett is particularly concerned about competition from Turkey, where production is up 600,000 tonnes year on year. That is going to be a problem for Canadian farmers unless the Turkish government restricts exports.
Turkey is the main reason durum prices didn’t rally more in 2023-24 when global durum supply was the lowest on record.
Turkey caught the market by surprise by suddenly becoming a major exporter of the crop. The speculation is that some of that business was Russian durum being routed through Turkey.
That’s where things get interesting because while Turkey’s crop is larger than last year, there have been problems with Russia’s crop.
“The quality of the durum in the Urals in Russia has got to be very, very poor because they’ve just had so much rain here at harvest,” said Burnett.
COCERAL estimates farmers in the European Union produced 7.54 million tonnes of the crop, up slightly from the 7.41 million tonnes produced last year.
However, France had problems with excessive moisture and a lack of sunshine.
“The overall quality of the EU durum crop. I don’t think, is particularly good,” he said.
Canada’s exports are off to a decent start, but they’re not “mind-numbingly” strong, said Burnett.
Canada has exported 232,700 tonnes of the crop via bulk shipments through week six of the 2024-25 crop year, which is nearly identical to the 223,100 tonnes exported in the same period last year.
Exports have been disrupted by rail and port labour disputes.
“It’s going to be tough for durum to rally under the current circumstances,” said Burnett.
The true tale of exports will be told during the final quarter of the 2024 calendar year, just prior to the Australian harvest.
“We’ll see what kind of competition is out there for the Canadian higher quality customers,” he said.
Agriculture Canada is forecasting 4.8 million tonnes of durum exports, up 38 percent from the previous year due to strong demand from North Africa and parts of Europe.
It estimates that the average price for No. 1 CWAD with 13 per cent protein in Saskatchewan will be $325 per tonne in 2024-25, down $100 per tonne from last year’s levels.
For almost 30 years of expertise in the agri markets, UkrAgroConsult has accumulated an extensive database, which became the basis of the platform AgriSupp.
It is a multi-functional online platform with market intelligence for grains and oilseeds that enables to get access to daily operational information on the Black Sea & Danube markets, analytical reports, historical data.
You are welcome to get a 7-day free demo access!!!
Got additional questions?
We will be happy to assist!
Write to us
Our manager will contact you soon