The restocking of North American durum supplies is proceeding much as anticipated.
“Unless the last half of the growing season is extremely negative, we’re going to see a fairly substantial increase in production year-on-year in both the U.S. and Canada,” said Bruce Burnett, director of weather and crop surveillance with the Canadian Wheat Board.
On July 11, the U.S. Department of Agriculture released a report forecasting a 2.45 million tonne durum crop, up 25 percent from last year.
“That’s right along the lines of what we were expecting,” said Erica Peterson, marketing analyst with the North Dakota Wheat Commission.
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Irrigated durum in Arizona and California is already in the bin, and producers were pleased with the results. In North Dakota and Montana, where most U.S. durum is grown, seeded acres are up from last year but yield prospects and crop condition ratings are down.
The USDA forecasts yields of 27 bushels per acre in North Dakota and 21 in Montana, down from 30 and 24 respectively in 2007. Peterson said it has been dry in western North Dakota, but she feels it is too early to be cutting yields.
She said crop quality looks “fairly good” to date, with no disease problems. The only thing producers are worried about is crop stress brought on by recent warm temperatures.
“If we continue to be dry the yield potential just isn’t going to be there. That’s the main issue right now.”
U.S. markets had already factored in the forecast for a larger crop. Old crop prices have hovered around $10 US per bu., half of February’s values and down substantially from the $12 to $14 that durum fetched a few months ago. New crop prices are $9 to $10 per bu.
The Canadian Wheat Board’s Pool Return Outlook and port asking prices reflect the prospects for a bigger world crop.
The June PRO for No. 1 durum 11.5 percent protein for 2008-09 at port is $338 Cdn per tonne compared to the 2007-08 PRO of $494.
On July 11, the CWB asking price for No. 1 durum in Thunder Bay was $611.85 per tonne, down from $654.98 per tonne June 30.
Burnett said that is a reflection of the crop coming off in Mediterranean countries.
Despite initial quality concerns, the durum crop looks good in Italy, Spain and France.
The same can’t be said for the North African crop, where yields in Tunisia, Algeria and Morocco have been poorer than average.
“That portends fairly well for export demand in the upcoming year,” Burnett said.
Canadian crop conditions are mixed. Crops in southern Alberta and western Saskatchewan are in good shape after recent rain and heat.
“We’ve finally seen that crop growth spurt that we needed to start moving back closer to average, although we’re still certainly behind normal in terms of crop development.”
Burnett is concerned about eastern Saskatchewan, which has low subsoil moisture.
Overall, he believes yield prospects are below average, but production should still be up due to a 27 percent increase in seeded acreage. Agriculture Canada is forecasting five million tonnes of production, up 36 percent from 2007-08.
