Welcome to Market’s new location.
Our regular package has moved forward to this new permanent location in the paper, joining the sweep of our top news, because you’ve told us that market information is among your priorities.
For a full explanation of changes in this week’s paper, read Barb Glen’s Notebook column on page 13.
It is a good time to be a durum grower.
Stocks are tight, prices are high, demand is strong and a good crop is in western Canadian fields.
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Strong canola exports expected to tighten supply
Canola exports will end up the third strongest in the past 10 years, according to recent Canadian Grain Commission weekly export data.
The Canadian Wheat Board Thunder Bay asking price July 13 for No. 1 durum was $365 per tonne, up more than $100 from $261 June 11. A year ago the price was $217.
This is despite an expected 30 percent jump in Canadian production to 4.37 million tonnes and a 47 percent jump in U.S. production to 2.14 million tonnes. Australian production is expected to recover to about 500,000 tonnes after last year’s drought and European production will be about static.
The North American increases alone are about 1.7 million tonnes over last year, but that is offset by poor crops in many parts of the Mediterranean basin.
Moroccan production is down about one million tonnes.
Syria, which often produces about two million tonnes and exports around 300,000 tonnes, also had a disastrous crop and recently said it is unlikely to export this year. It is also dry in Turkey, another important regional exporter, and production is down there, too.
The net result is that world production in 2007 will likely be close to the previous year, which means year-end stocks will again be exceptionally tight. For example, Agriculture Canada forecasts that Canada’s 2007-08 year end stocks will fall to one million tonnes from 1.3 million at the end of the current crop year.
The rapid rise in prices has millers in a major importing country, Italy, complaining about having to increase the price of pasta.
The current record asking price for durum will likely ease off if Canada and the United States can harvest their crops. However, values should remain strong and the CWB durum pool return outlook should climb and increase its premium over spring wheat.
