FYI Durum politics

[charliep]

I note that loan deficiency payments are not directly tied to how
a US farmer markets their grain. Durum sold in the fall could
be forward priced, sold off the combine at the daily price or
stored into the winter/spring. LDP is simply a calculation and
payout.

What has more impact on prices? The monstrous carryover of
durum as a result of the CWB deciding to hold durum off the
market for the past 2 years or an extra 200,000 to 600,000
tonnes of US durum as a result of the loan rate. The unknowns
in tomorrow's Stats Can seeded acreage forecast will be way
bigger than the above let alone including weather uncertainty.
The issue at the present time is there is more durum that
markets at the current price.

[cityguy]

Charlie is right in that the only stipulation is that the farmer have "beneficial" interest in the durum. That being said, a $6.08 loan will encourage more off combine selling than would normally be the case. The extra 200,000-600,000 in and of itself may not be a big deal, but the $6.08 doesn't just apply to that. Also - you can bet any buyer is simply going to pull/lower the bid given this news, whether it's for Canadian durum / US / Mexican / local.

Stats Canada's durum report better have acres down at least 25% which is probably about 4.2-4.4 million. Better that it be down under 4. If it's not under 4.5 then there's a problem.