Prairie farmers are (already) reacting to Plant 2019 implications

In this week’s Wheat Market Insider, we’re starting in durum. The USDA’s attaché in Algeria says that soil moisture conditions are sitting above average, and combined with average temperatures, the outlook for this year’s crop is relatively favourable.

Total grain acres in the country are pegged at 8.77 million acres, a 3% jump year-over-year, but we know that durum and barley acres are expected to increase this year, thanks to more profitable returns than common wheat.

Part of the increase is due to some government support as Algeria is currently entering its second year of its goal of becoming more self-sufficient in durum and pulses, and the impact is being felt by Canada. Up until this year, Canada’s share of durum imports by Algeria had been growing steadily, from 42% just five-years ago to more than 64% in 2017/18, shipping them 1.148 MMT.

However, through February, CGC data shows that Canada has exported only 140,400 MT to durum to Algeria in all of 2018/19! This is down 75% from the 540,900 MT delivered by the same time a year ago! Other notable destinations for Canadian durum include (data for the 2018/19 crop year through February 2019):

·Italy: 249,000 MT (tracking -13.4% year-over-year);

· Morocco: 442,800 MT (-19%);

· Japan: 121,000 MT (+9%);

· Turkey: 166,300 MT (+70%); and · United States: 396,600 MT (+12%). Total durum exports are picking up a little bit, with 2.58 MMT now shipped out through Week 36, which is about 7.2% behind last year’s pace.

Average cash durum prices for spot movement are getting closer to values last seen in August 2018 but have been relative stagnant. A few more good weeks of export activity might be able to boost prices in May, when, we tend to see a bit of seasonal support.