WINNIPEG — Canadian durum prices are at a standstill as the market looks to upcoming production, while domestic crops act as a “wild card,” one Winnipeg-based analyst says.
“The durum market is certainly quiet right now. We’re kind of in that period where we’re in a lull,” said Jerry Klassen, manager of the Canadian office for Swiss-based grain trader GAP SA Grains and Produits.
The durum market lacks demand ahead of harvest in competing growing regions, he said.
Crops from Mexico will begin to come on-stream in May, while Europe’s new crop is expected to emerge soon.
“The crops are looking in pretty good shape overall, so there’s not a lot of activity,” Klassen said.
As for Canadian production, Agriculture Canada expects farmers to seed less durum this year, projecting about five million acres, compared with about six million last year.
Though the government expects a scale-back, Klassen said production numbers are still uncertain.
Saskatchewan Agriculture’s Crop Planning Guide 2017 shows durum as one of the more profitable crop choices, alongside lentils and canola.
“Is the farmer going to react based on last year’s prices or the prices from two to three years ago? It’s hard to say. I really think that’s the wild card in the market right now,” Klassen said.
“I think the market needs to discourage acres.”
He said there will likely be a large carryout of Canadian durum, which could put a lid on acres.
Spot prices for Canadian durum are $6.44 to $7.35 in per bushel in Saskatchewan and Alberta, while new crop bids are $6.50 to $6.85.