Winnipeg, Aug. 11 — The durum market in Western Canada had a good run higher, but is starting to stall out and is likely headed lower as the North American harvest pressure ramps up.
Durum bids had climbed as high as $10 to $10.25 per bushel for No. 2 durum in recent weeks, but “now we’re on the way down,” said Jerry Klassen, manager of the Canadian office for Swiss-based GAP S.A. Grains and Products.
Current prices are topping out around $9.50 per bu, according to Prairie Ag Hotwire data.
Klassen said there were four main bearish factors weighing on durum, which could cause bids for No. 2 durum to fall to the $8 per bushel level over the next few months.
• Rain in July helped improve the Canadian crop prospects. “It’s not getting any smaller, but is stabilizing or maybe getting larger in size,” he said.
• The U.S. harvest is advancing and is bigger than originally expected. The latest USDA crop report shows that one percent of the North Dakota durum was harvested as of Aug. 9, with an additional 80 percent turning colour. Montana’s crop was 12 percent harvested, with 98 percent turning colour. Klassen estimated that the Canadian durum crop would also be about 50 percent harvested by the end of August.
• The quality of the Canadian crop will be good, with about 80 percent hitting No. 1 or No. 2, according to Klassen. He said with the likelihood of an early harvest there was little chance of frost damage, with above average protein levels expected. Durum in North Dakota is also high quality, with 83 percent rated good-to-excellent, according to the USDA.
• There is little significant export demand for the time being, with fresh tenders from Algeria and Tunisia not expected until after Canada’s harvest. Klassen noted that there will be stiff competition to fill those tenders when they come out, given the larger U.S. crop and good quality durum in Europe.
