A Chief Market Analyst with Grain Fox believes durum wheat prices won’t spike to 20 dollars a bushel like they did in 2021.
Neil Townsend could see durum trade around 15 dollars, but it largely depends on demand around the world.
“There’s a big shortage in Tunisia, tight situation in Algeria, big shortage in Morocco, poor quality and lower quality in Italy, basically a write-off in Spain,” Townsend said of issues facing countries that import durum or produce it.
He added some countries, such as Tunisia, Algeria, and Morocco, are recovering from pandemic-related policies may not have the cash needed to make purchases right now. Algeria, which last bought Canadian durum July 11th, had to cancel a 50-thousand metric tonne durum tender due high prices last week.
Canada is the largest exporter of Durum, but with drought plaguing the Prairie provinces production estimates will likely be lower this crop year.
Townsend says some have estimated 3.5-million or 4.5-million tons of durum production from Canada, but Townsend expects around 4.1-million.
“I’m not at the low side but I’m not on the high side either, and that sort of reduces our export potential by about almost 1.6 million tons from the previous year,” he noted.
“There is indications that Turkey may be able to export in incremental (amounts of) five to six-hundred-thousand tons, so that lessens a little bit of the price escalation we could see but the prices probably have to go up because we have to cut off demand from somebody in North Africa or from the European Union, so it’s just a very tight situation and it is supportive of prices.” Townsend continued.
He says the Prairies are in a moisture deficit right now, and if it persists into May and June of next year, then prices could skyrocket; again that depends on how other durum producing countries in Europe fare weather-wise.
