Poor growing conditions in Western Europe are mitigating the market damage that good growing conditions in North America and North Africa have caused to durum prices.
Odd little markets are popping up to take some supplies off the market that wouldn’t find much demand this year from North Africa.
“We’ve seen sales to England and Switzerland,” said market analyst Erica Olson of the North Dakota Wheat Commission.
“That’s unusual, and I can only surmise it’s because they’re worried about sourcing supplies in Europe.”
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Durum has disappointed producers this summer because many hoped to see prices rebound this year. But North Africa, the biggest market, has experienced great weather and is harvesting a large crop.
Morocco and Algeria are expected to each double their production from last year, harvesting 1.9 million tonnes and 2.2 million respectively.
Syria’s crop is also expected to be much larger than last year and Turkey’s is about equal.
North American crops appear to be larger than what was expected earlier this summer when cold temperatures, late seeding and drought threatened to reduce production. However, better weather has allowed the Canadian Prairies and U.S. Great Plains to produce big crops that will be seeking markets within weeks.
The saviour for prices right now is Europe, with poor crops reported in Italy. The International Grains Council (IGC) expects Italian production to fall to 3.3 million tonnes from last year’s 5.2 million.
France and Spain are reported to have good crops, but they are about the same size as in 2008-09.
The IGC is reporting that durum ending stocks for 2009-10 in Canada, the European Union and the U.S. will likely be 2.9 million tonnes, which is large although not as big as the 3.3 million now in storage.
Canadian Wheat Board Pool Return Outlook prices for durum fell in July, dropping to $7.62 per bushel in-store Vancouver or St. Lawrence for number one Canada Western Amber Durum with 13 percent protein from $8.11 in June.
