There was good news for durum producers last week.
Most analysts had forecasted lower durum prices in the coming crop year.
They expected a larger durum area in Canada and the United States and weaker demand from North Africa because of an improved crop there.
But the picture is changing.
The U.S. Department of Agriculture’s March seeding intentions survey showed American farmers, mostly in North Dakota, intend to seed 12 percent fewer acres to durum this spring.
David Boyes, Canadian Wheat Board analyst for South America, said the drop is probably linked to American growers’ uncertainty about how the Crop Revenue Coverage program would handle durum.
Read Also
One Beer Market Updates Day 3 – Lentils and beef
Day 3 of the One Beer Market Update at Ag in Motion 2025.
The CRC is similar to the old Gross Revenue Insurance Plan in Canada. An artificially high CRC support price for durum in 1999 sparked a big jump in North Dakota durum acreage.
But last month, the USDA’s Risk Management Agency decided to eliminate the special CRC support price for durum. The coverage will be based on spring wheat price instead.
Of interest to those who watch the still life image of the Winnipeg Commodity Exchange’s feed pea and oats contracts, the reason the Risk Management Agency dropped durum was that it couldn’t determine a realistic base price because of too few trades on the durum contract on the Minneapolis Grain Exchange.
Lower acres, higher demand
Boyes said the CRC durum change was announced after the USDA seeding intentions survey, so the actual U.S. durum acreage might be even lower, particularly with the disease problems
they have experienced.
The demand side of the equation is also improving.
North Africa — Algeria, Tunisia and Morocco — is a key market for durum exports.
It had suffered two years of drought, but early last winter it looked like the rains had returned. But the tap closed in recent weeks, just as the durum crop there was filling.
It is too early to say how badly the crop will be damaged, but the import demand outlook has improved.
Finally, the first USDA status report on the U.S. winter wheat crop should also support the market.
It rates just 44 percent of the crop as good to excellent compared to 60 percent last year.
Twenty percent is very poor to poor compared to 14 percent last year.
