CNS Canada — North America’s smaller durum acreage base in 2017 could give prices a boost later in the growing season, depending on how yields shape up for the new crop, according to a U.S. analyst.
Disease issues in 2016 and better projected returns for other crops in 2017 are expected to lead to a 17 per cent reduction in both U.S. and Canadian durum acres, according to reports from Statistics Canada and the U.S. Department of Agriculture.
Canadian farmers intend to plant 5.1 million acres of durum in 2017, down from 6.2 million the previous year. In the U.S., acreage is forecast at two million, down from 2.4 million in 2016.
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“The market will probably be tranquil here for a bit, but with the lower acreage base and if we slip lower on yield, we could be looking at some stronger durum prices,” said Jim Peterson, marketing director with the North Dakota Wheat Commission.
“The end-users are a bit concerned with the declining acres in the U.S. and Canada,” he said, noting the commission recently hosted a group of durum buyers from Morocco and Algeria.
North Africa is a major customer of durum from both Canada and the U.S. Even though the region’s own crops are in relatively good shape this year, it always relies on North America for higher-quality imports as well, Peterson said.
While both Canada and the U.S. will have ample durum carryover stocks this year, quality issues limit the market possibilities, he said.
In Canada, the durum is being blended into feed, but Peterson said greater availability of corn and lower-protein feed wheat was limiting that activity in the U.S.
However, quality issues in the U.S. were also not as severe as in Canada. “If we have a good-quality crop, there will be opportunities to upgrade some of that carryover stock,” said Peterson.
Looking ahead, he said quality and harvest weather will always be the wild card for durum, with concerns over tightening supplies of high-protein wheat in the U.S. also likely to underpin values going forward.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow him at @PhilFW on Twitter.