Market Update November 2019

 

PRODUCTION

After an abundant harvest in 2018, World durum production in 2019/20 is set to fall due to a general reduction in areas sown to durum and poor-quality grain resulting from adverse harvest delays in the major exporters, Canada and USA.

Canada experienced dry conditions in August and now harvest has been delayed due to snow and persisting wet conditions. Approximately 90% of the durum crop has been harvested in Canada to date. Yields have been poor in Alberta although grain quality has been good and conversely in Saskatchewan yields are adequate, but the grain quality has been severely impacted by the wet weather delays. Strategie Grains predicts that only 15% of the Canadian durum harvest will meet the CWAD 1 criteria.

The US durum crops have also been hampered by cold and wet weather, with fields left unharvested and grain quality down.

Yields have been average across the European durum growing areas, however with a smaller growing area, durum production has been down on last year. There have been mixed results from the major durum growing countries. The grain quality in Italy and Greece was disappointing, however, France and Spain produced exceptional grain quality.

Production in other areas, Kazakhstan, Argentina, Turkey and Morocco, have also fallen, with each of these regions experiencing unfavourable weather conditions during the growing season. Meanwhile production in Algeria has been the largest recorded. A favourable durum price compared to soft wheat, increasing access to irrigation and improved cultivation techniques proved to be incentives for Algerian farmers.

DEMAND/TRADE

The demand for durum wheat uses in the animal feed sector is rising in Canada and the USA to reflect the downgrade in quality of much of their harvested grain. It has also been reported that there has been considerable waste in Algeria as the country has struggled with efficient storage of the large harvests recorded in Algeria over the last two years, adding to the increase in demand of lower quality grain in the animal feed sector.

STOCKS

Strategie Grains is predicting that the global durum inventory will contract sharply compared to 2018/19. Despite the marketing year beginning with high stock levels, the global market will continue to tighten as the year progresses, mainly due to declining carryout stocks in Canada, USA, Kazakhstan and Mexico.

 

LOCALLY

After exceptional initial rains, the durum growing areas of Southern NSW have since suffered with difficult weather conditions. SA growers, after good initial rainfall, failed to receive the follow up rains and many crops were also hit with severe frosts late in the season. Harvest has been in progress for the past two weeks, with yields reflecting the difficult growing season. The quality of the grain, however, has been very strong with high protein. The Victorian durum growing areas, after a dry start, did receive good rainfall in May and October, and an average season is still anticipated. Harvest in the West Wimmera region should commence in early December.