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Downgraded durum sparks premium

The premium market for durum is re-appearing in Western Canada, aided by harvest rain that has downgraded many late crops.

It doesn’t make up for the price slide of recent months, but making a few cents more per bushel is a positive development.

“Your number ones and number twos are probably going to be more desirable,” said Neil Townsend, market analyst with G3 in Winnipeg.

Those high grade durums will be used “to blend number fours into threes and even to try to blend some number fives into threes.”

Western Canadian durum is a tale of two crop maturities and three weather conditions.

The early crop, already harvested, is mostly No. 1 and 2 with good quality. Later crops and those still in the field are a mixed bag, with some damaged by wet weather.

Weather wise, the crop was jolted first by the drought on the western Prairies, then helped by great midsummer weather and then hit by rain.

Townsend said the early season prediction of 75 percent No. 1 and 2 durum has now changed to only 51 percent in the two top grades.

That’s good for premiums for the top grades, but the plight of those stuck with No. 4 isn’t as bad as in some years. Townsend said there is little durum carryover from 2014-15 and the low grades produced this year aren’t overwhelming. Markets for lower grade durum will probably be easy to find.

Little Canadian durum is moving yet but U.S. crop is.

Their movement is greater than normal for this time of year, reflecting low global carryover and good demand for quality crops.

Damaged durum is unlikely to end up in the feedgrains market, said Jared Seitz of the Alberta feedgrain brokerage Agfinity.

“There’s quite a price spread, so farmers don’t seem willing to do it,” said Seitz.

John Duvenaud, publisher of the Wild Oats markets newsletter, said he recommended aggressive durum sales early in the season but is now marketing other crops.

“We’re sitting tight right now.”

Durum might not influence the western Canadian feed market, but downgraded malting barley varieties might begin appearing.

The wet weather is knocking some barley out of malt markets.

“The amount of feed grain in Western Canada is being accelerated,” said Townsend.

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