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WMR-World Durum Crop Smaller but World Trade also Lower

by Jim Peterson

Break Date: 11/7/2017 8:48:45 AM
Last Edit: 11/7/2017 8:48:45 AM

The 2017 world durum crop, according to the International Grains Council (IGC), is estimated at 1.34 billion bushels, down by 8 percent from 2016 with significant production declines in Canada and the U.S. offsetting a notable rebound in production in North African countries. Canadian production is currently estimated at 154 million bushels, well below the 2016 crop of 287 million due to lower planted area and drought reduced yields in southern Saskatchewan. Based on harvest reports however, Stats Canada is expected to raise the 2017 production estimate slightly in December. In North Africa, combined production in Algeria, Morocco and Tunisia is pegged at 191 million bushels, up significantly from 125 million in 2016. The EU and Mexican crops were down marginally in 2017.

World trade in durum is projected at 312 million bushels, down from the recent 3 year range of 325 to 340 million. The larger crops in North Africa are the primary reason for the lower forecast, along with lower trade in feed, due to the vastly improved quality profile of the Canadian and EU crops in 2017. Canada is anticipated to capture one-half of world durum trade, similar to a year ago, but down from their recent high of 60 percent. The EU will account for 16 percent of world durum trade, and Mexico 14 percent with the balance split between the U.S., Kazakhstan and Australia.

A potential positive for world durum prices as the marketing year unfolds, is based on tightening stocks in Canada by the spring of 2018. The IGC is projecting year end durum inventories in Canada to fall to 29 million bushels, less than one-half of June 2017 inventories, and approaching a 20 year low. A larger than expected share of the 2016 Canadian durum crop moved into domestic feed channels last year due to high DON levels and lower grade parameters, which quickly diminished the carry over impact of their record large 2016 production. The success of Canadian exports into a tighter world trade environment will be key to taking their durum carryover down to more price supportive levels.