Farmers with quality durum will be able to deliver their entire crop this marketing year, says the Canadian Wheat Board.
“For No. 1 and 2, and probably even for No. 3, there will be no restrictions on deliveries by farmers,” said CWB market analyst Neil Townsend.
“All of the 1, 2 and 3 that is available to us we should be able to market this year.”
Townsend said that’s because quality durum will be in short supply around the world this year.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
The Canadian crop also took a beating from poor conditions during seeding, growing and harvesting seasons, resulting in plenty of No. 3, 4 and 5.
The board says this year’s durum crop will be about 3.3 million tonnes, up from the July estimate of 2.9 million.
However, Canadian durum supplies have been bolstered by 2.7 million tonnes of high quality carry-over stocks from 2009-10, which will account for 47 percent of the 2010-11 supply.
The board said in its most recent Pool Return Outlook that there is sufficient Canadian quantity to satisfy world demand, but it will be a challenge to accommodate all of the customers that want No. 1 or 2.
Townsend said the tough farming conditions have resulted in slow deliveries into the elevator system. He urged farmers to start moving their durum soon.
“Anything that comes into the system now can be sold and shipped very quickly,” he said.
“We have sales commitments that need to be fulfilled right now.”
Townsend said the board also expects to be able to market most of the No. 4 and 5 durum.
Customers in markets such as South Korea often blend low quality durum with high quality to produce an acceptable milling quality, while the European Union will be looking for No. 5 strictly for feed purposes.
A strong euro, as has been the case this fall, is also positive for Canadian sellers, making European durum more expensive for foreign buyers and making durum sold into the EU cheaper.
“Looking forward, we have to be positive about the durum market,” he said.
The initial payment for the base grade No. 1 durum 12.5 percent protein is $119 per tonne at port, less than half the latest Pool Return Outlook of $270.
The initial works out to less than $1.70 per bushel at the elevator. The CWB said Oct. 14 it had recommended to the federal government increases to the initial payment.
Ottawa must approve the increases. The board said the process might be complete by mid to late November.
Delivery calls on No. 1 and 2 durum are in place and the CWB will terminate the first 25 percent call effective Nov. 29. In addition to series sign-up, a Guaranteed Delivery Contract with 100 percent acceptance has been announced for No. 1 and 2 CWAD.
———
Total supply 7.305 5.753
