As the region’s durum producers were preparing for harvest to begin, durum prices surged. The reason for the surge is still uncertain, but producers were pleased with the increase in prices.
Market analysts believe that concerns about the declining crop conditions in North America and the overall tight world stocks situation are contributing to the strength in the market. The recent hot and dry weather in Canada has particularly raised concerns. Crop condition ratings in Saskatchewan have declined significantly, with only 16 percent of the crop rated as good-to-excellent and over half rated as poor-to-very poor. In Alberta, 30 percent of the crop is in good-to-excellent condition.
Despite official estimates projecting higher production compared to last year in Canada, a recent crop tour estimated production to be much lower. This has caused the market to react. Canada is the largest world durum exporter, so the situation there is being closely monitored.
Other projections around the world suggest that North Africa will import more durum this year, while Europe has experienced some quality issues due to rain at harvest. The overall world supply and demand situation is tight, with production sitting at 1.15 billion bushels, similar to last year. However, the ending stocks number continues to shrink and is now at 130 million bushels, down almost 40 percent from last year.
In the U.S., crop condition ratings for durum in North Dakota and Montana have been declining. Although some areas have received precipitation, the recent hot temperatures have affected crop conditions. About 55 percent of North Dakota’s durum is still rated as good-to-excellent, but this is a decrease from the previous week. Yield potential is described as average, with some producers expecting below-average yields and others expecting above-average yields depending on rainfall for the rest of the season. Harvest has not yet started as of July 31.
With the decline in crop conditions and tight world stocks, durum prices have seen a surge in the market.