(NewsDakota.com/NorthDakotaAgConnection.com) – While prices for other wheats have fluctuated in recent weeks, durum prices held steady throughout March ahead of USDA’s Prospective Planting Report on March 31.
Cash bids for durum have been about the same as earlier in March, with most coming in at $8.75, although in some locations prices had dipped down to $8.50, according to Erica Olson, market development and research manager for the North Dakota Wheat Commission.
“Not much has changed fundamentally. Domestic pasta demand remains strong. However, as we’ve discussed this whole year, buyers are just not expanding coverage very far out,” she said.
According to Olson, Milling & Baking News reported that second quarter coverage is at about 85 percent. She pointed out that buyers expand coverage when the prices dip a little bit and then wait.
“Third quarter coverage is only slightly better at 20-30 percent, indicating that millers are not making purchases very far in advance,” she said, adding that pasta demand remains very strong. “Most mills are running 5.5 to 6 days to keep up with demand, so that’s positive,” she added.
On the demand side, Olson noted there was some activity in terms of exports. The U.S. did have a sale to Algeria of 1.2 million bushels (MB), which put total U.S. durum sales at 13.5 MB – almost double last year’s pace. However, USDA is still projecting 20 MB in sales, so there is still a ways to go to meet that goal.
“Even though our pace is much higher than last year’s, it is still slower than average. Again, that kind of weighs on prices, as well,” she said.
With that sale, Algeria is now almost on par with Italy in terms of total sales. The U.S. has sold 5.4 MB to Italy and 5.3 MB to Algeria. The remainder of U.S. durum sales have been to Tunisia at just under a million bushels, with smaller amounts to Japan and Guatemala, as well as 1.5 MB to unknown destinations.
Looking at some of the other major exporters, Olson noted that European durum exports are not quite double what they were last year, with most going to North Africa. Canadian durum exports are double, as well, with their markets very similar to the U.S., largely Italy and North Africa.
“Similar to spring wheat, there is just a lot of competition for durum exports and the U.S. hasn’t been the most competitive this year,” she said.
In other news, the International Grains Council (IGC) recently released its first look at world durum production for 2023-24. The report didn’t have much news that was very exciting for the market. In its report, the IGC has production fairly stable compared to last year at 32.8 million metric tons. The IGC also has the use numbers very similar and has ending stocks declining by 10 percent due to lower production the past few years.
In terms of current conditions, Olson pointed out the European crop is faring well so far. European production is forecast to be 5 percent higher in 2023. However, drought concerns remain for parts of North Africa. So even though Morocco is expected to rebound some from last year’s drought-afflicted crop production, the IGC is still forecasting below average production there, as well as declining production in Algeria and Tunisia.
In North America, the IGC saw no big changes either way for the U.S. and Canada.
Looking at the desert durum crop in the U.S., it remains in “really good condition.” The region has fairly good moisture at this time. In Arizona, about a third of the crop has headed out, which is slightly ahead of average, so all is going well there thus far.
For the northern durum crop, Olson said there are a lot of questions on acreage and planting for the 2023 crop.
“Even though a lot of durum areas in the region don’t have as much snow, they still are covered in snow and it’s still been cold, so growers are not anticipating an early planting season,” she said.