Winnipeg, March 22 (CNS Canada) – Canadian durum prices are losing their premium over other wheat markets, but staying relatively steady even with hearty harvests and lagging demand, one analyst says.
“I think what will drive the durum market here now is the overall wheat complex,” said Jerry Klassen, manager of the Canadian office of Swiss-based grain trader GAP SA Grains and Produits.
Durum’s premium over spring wheat will likely narrow in the coming weeks, as global wheat markets build in a risk premium.
“That’s probably going to be more of an influence on durum than the actual durum situation itself,” Klassen said.
He added that new crop prices are stagnant, while old crop prices are under slight pressure.
New crop bids range from C$6.02 to $6.42 per bushel in Alberta and Saskatchewan, while delivered elevator durum prices are between $6.87 and $7.66 in those provinces, according to Prairie Ag Hotwire.
“If the market is well-supplied you don’t really see any active price movement, or major price activity,” Klassen said.
Global durum production is active as harvest nears in Europe and Mexico.
“And at the same time we’re looking at North American seeding acreage intentions,” Klassen said.
Canadian farmers are expected to seed 5.9 million acres of durum this season, according to early estimates from Agriculture and Agri-Food Canada.
The bulk of Europe’s durum harvest takes place in June, Klassen said, adding that the region’s crop is shaping-up well, with bigger production expected from both Italy and France.
“Right now it’s a critical time for that crop for final quality and yield development.”
Growing conditions in Mexico are also favourable, and yield development in the country is healthy.
The strengthening Canadian dollar is keeping some pressure on prices in Canada.
“The demand so far this crop year hasn’t been very good, we’re lagging marginally on exports compared to last year,” Klassen said.
He expects Canada’s export pace to slow in the final three months of the crop year due to harvest in competing regions.
Canadian durum exports as of March 13 were at about three million tonnes, compared with 3.4 million the prior year, according to data from the Canadian Grain Commission.
