Recent rain in northwestern Africa has dampened more than the ground.
It has also dampened hopes for any increase in the price outlook for durum wheat in 2009-10.
The U.S. Department of Agriculture recently predicted the potential for bumper or even record crops in Algeria, Morocco and Tunisia, three countries that normally import significant volumes of durum.
“If the region continues receiving favourably wet weather this spring, its imports could be dramatically reduced,” said the Feb. 3 report.
All three countries have suffered from droughts of varying severity recently.
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Bruce Burnett, director of market analysis for the Canadian Wheat Board, said if that had continued for a third straight year, it would have been bullish for prices.
But extensive rainfall over the past three months, the traditional rainy season, has all but washed away any chance of that.
“It looks like they’ll be having a recovery in production from the last couple of years,” he said. “In terms of any hope for upside surprises for our next outlook for durum, the rains are definitely putting a damper on it.”
Despite producing about 3.9 million tonnes of durum annually, the three countries constitute the No. 1 durum importing region in the world and are major customers for Canada.
According to the International Grains Council, out of 7.1 million tonnes of durum traded globally in 2007-08, about three million will go to those three countries.
In 2007-08, the CWB exported 764,000 tonnes to Algeria, 622,000 to Morocco and 11,000 to Tunisia, for a total of 1.4 million tonnes. That represents about 32 percent of total Canadian exports.
The average for the previous 10 years was 1.53 million tonnes, or about 42 percent of the average 3.67 million.
The current Pool Return Outlook for durum for 2007-08 is $360 a tonne ($9.80 a bushel), less freight and handling.
The first PRO for 2009-10 will be released Feb. 23 at Grain World, the CWB’s annual market outlook conference.
Burnett declined to estimate what that number will be, but said durum is subject to the same factors that have driven down all commodity prices from last year’s levels.
“All prices have definitely been pushed lower,” he said.
Agriculture Canada’s market analysis division forecast 2009-10 durum prices will be 12 percent lower than 2008-09.
Burnett said the board expects Canada’s 2009 durum acreage to decline by 15 to 20 percent from roughly six million acres in 2008.
He said Canadian acreage increased by almost 25 percent last year as producers in the northern tier of the Prairies – a non-traditional durum area – responded to higher prices.
“We assume some of that will go back to wheat or canola, and durum will be more in the traditional production region,” he said.
Carryout stocks on July 31, 2009, are expected to be 1.9 million tonnes, more than double the previous year’s 842,000 tonnes.
Jim Peterson, marketing director for the North Dakota Wheat Commission, said new crop durum contracts south of the border are averaging $7.75 US, which works out to $9.45 Cdn as of Feb. 9.
“That’s not enough to produce a lot of early season interest,” he said, although he noted durum compares pretty favourably with other crops.
He expects acres will be down, probably by around 10 percent, although he added private forecasters have been all over the map, from a 20 percent drop to no change.
Plantings of desert durum (grown under irrigation in Arizona and California) last fall, when prices were around $10 a bushel US, declined 16 percent.
