Durum supplies not expected to be excessive

There is very little risk of farmers around the world over-producing durum in 2022-23, and that should keep prices firm, says an analyst.

LeftField Commodity Research analyst Jonathon Driedger is forecasting 16 million tonnes of production by the key exporters of the crop — the European Union, Canada, the United States and Mexico.

That would be well above last year’s 13 million tonnes but below the previous five-year average.

In addition, carryout from the 2021-22 crop is expected to be extremely low at just over two million tonnes, which is about half of normal.

“By no means are we going to see some big supply build-up,” he said during a presentation at Alberta Wheat Commissions’ Spring Market Update webinar.

Production prospects are mixed.

He expects yields will be better than average in the European Union, where FranceAgriMer is reporting that the French durum crop is rated 85 percent good to excellent.

However, it is dry in North Africa. Morocco’s agriculture minister estimates the wheat crop will be 78 percent lower than last year’s bumper crop.

Mercantile Consulting Venture is forecasting that Morocco will need to import 1.5 million tonnes of durum, surpassing the previous record of 1.3 million tonnes in 2020-21.

Canada could ship 890,000 tonnes to Morocco, which would be one of the biggest export programs to that country on record, according to Mercantile Consulting.

Driedger expects that 5.7 million acres of durum will be planted a Canada, up from 5.5 million acres last year.

Durum prices peaked in late-fall/early-winter and have drifted sideways to lower since then.

He anticipates a “tepid supply response” from Canada because it usually takes two years for yields to fully rebound from a drought, and carryout is basically nothing.

Driedger is forecasting about 5.2 million tonnes of Canadian supply in 2022-23, up a couple million tonnes from last year but below the previous five-year average of around seven million tonnes.

That is going to create a tight outlook once again for next year. There will be no cushion for any hiccup in supply, especially with strong anticipated demand from North Africa.

That might be wishful thinking, considering it remains dry in the western half of the Canadian Prairies and the northern U.S. Plains region.

Tags: Canada, Mexico, European Union, Production, exporters, crop, durum, forecasting, prices, United States