durum

[Jagfarms]

Durum prices down compared to HRSW, but starting to follow By SUE ROESLER, Farm & Ranch GuideWednesday, August 11, 2010 2:04 PM CDT    Durum prices are finally starting to follow the prices of spring wheat and other classes of wheat, although not by much.Producers in the U.S. are seeing good yield potential out in the fields and hope prices continue to rise. Current cash prices are in the $4 to $4.50 range which are up from the $3.70 to $4 range a couple of weeks ago, and up from the $3.25 to $3.50 range a couple of months ago.“Hopefully, the weather will cooperate for producers until harvest is complete so those predicted good yields and quality will be realized,” said Erica Olson, marketing specialist for the North Dakota Wheat Commission.Durum cash prices are still at a fairly large discount compared to hard red spring wheat prices, Olson said.    Estimates for world durum production are down from a month ago, and are at 1.3 billion bushels right now.Rain during harvest in the European Union has damaged both the yields and quality of the durum crop, Olson said.    “We expect durum imports from the EU to be higher, and that is expected to benefit the U.S. export situation,” she said.In addition, Syria has lowered its durum production estimates because of disease issues in the crop, Olson said.There has been drought in Kazakhstan, and that country has also lowered its durum production estimates, she added.Of course, Canada is also an unknown with its big cuts in planted acreage this year, Olson said.“The Canadian Wheat Board has now lowered its production estimates even further,” she said. Right now, Canada is estimating its production will be 107 million bushels this year, down from earlier estimates of 118 million bushels.“That is significantly lower than last year, when Canada produced more than 200 million bushels of durum,” Olson said.In Canada, similar to the U.S., the beginning stock levels were higher than average, so that will help with the production shortfall.“But the durum’s final quality in the U.S. and Canada will play a huge part in what happens,” she said.The U.S. Northern durum harvest is behind the average pace of 4 percent.“We haven’t seen any crop harvested yet," Olson said.According to the USDA crop progress report, 89 percent of the North Dakota durum crop is in good to excellent condition, she added.“Of course, we need to get it in the bin,” she added.The yield potential for durum is looking very promising right now, she said. The Wheat Quality Tour which was completed last week was able to tour some of durum country and it estimated the average yields to be 38.4 bushels per acre. That is about 2 bushels higher per acre than last year’s estimate, Olson said.Currently, durum export sales are a third higher than one year ago, she said. However, Italy did cancel a sale last week. Exports and sale numbers are at 15 million bushels of durum right now, she added.“We are seeing good export demand,” Olson said. The USDA expects exports to be 55 million bushels this year, she said.However, domestically, pasta manufacturers haven’t expanded their purchases yet, she said.“While demand is strong, we’re not seeing them purchase a lot of durum months and months in advance because of the lack of concern over supplies,” she added.Olson said the big event the durum market will be watching is the final durum production in both the U.S. and Canada in terms of quality and quantity of the crop.