Winnipeg, Sept. 7 (CNS Canada) – Quality issues with the Canadian durum crop currently being harvested should see the price spreads between the top and low end grain widen considerably, especially as the carry-out from the previous year is also poor quality.
Canadian durum stocks, as of July 31, 2016, were pegged at 1.1 million tonnes by Statistics Canada, in a report released September 7. That was above trade guesses and up slightly from the 956,000 tonnes carried over the previous year, but still below the five-year average.
“The direct off-farm movement to the US was sharply below year ago levels,” said Jerry Klassen, manager of the Canadian office of Swiss-based GAP SA Grains and Products in Winnipeg. However, he said overall durum stocks in Canada were still relatively tight, with the old crop supplies all of low quality.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
“It puts more emphasis on this year’s crop size and quality,” said Klassen, adding that it will support prices for higher quality number one and two milling grades of durum.
While the harvest reports are still coming in, “the quality situation on durum is quite severe,” according to Klassen. He said high levels of fusarium and vomitoxin were already leading to discounts on the lower grade crops, as the commercials don’t want the diseased stocks in the system.
“It’s going to get large,” said Klassen on the price spread between top and low end durum bids.
Spot durum bids in Saskatchewan currently range from about C$6.17 to C$7.20 per bushel, according to Prairie Ag Hotwire data.
