Market Update October 2019

PRODUCTION

The 2019-20 season will again see an increase in durum production in Algeria, Mexico, and Tunisia, who, according to the agriculture ministry, should record its largest harvest for 10 years.  However, the harvest forecast is for a reduction in production for Canada and USA and a reduction for the second season in a row for the EU (with France the exception) and Australia.

Canada experienced dry conditions in August and now harvest has been delayed due to snow and persisting wet conditions, raising concerns over the likely quality of the grain and yields this season.  The USA have also suffered with delays to the harvest which may impact on grain quality and yields.

Durum production in the EU is considerably down on last season. As well as a decrease in the growing area, yields were also lower due to dry conditions at the start of the season and a heatwave in June. The exception to lower yields however was France, yet despite good grain quality and high yields, the planted area was down on last season thus resulting in a lower production figure year on year.

DEMAND/TRADE

Strategie Grains is predicting that, worldwide, the demand for durum wheat for human consumption to be the same level as in 2018/19. The demand for durum wheat in the animal feed sector is expected to fall given that currently the proportion of grains meeting requirements for use in semolina and pasta, is higher than last season.

STOCKS

Strategie Grains also predicts that the size of the global inventory will decrease significantly with world supply and demand moving back into a position of equilibrium.

LOCALLY

After exceptional initial rains, the durum growing areas of Southern NSW have since suffered with difficult weather conditions. The SA durum growing areas, after a dry start, did receive good May rainfall however follow up rains have not arrived, and several severe frosts have impacted many crops. In Victoria, the situation is a little more optimistic, where initial rainfall was modest but follow up rains were welcome, and an average season should be achieved.