Durum

Algeria bought 230-250,000t of durum for last half May/June shipment at a price that works back to about $15/bu delivered Saskatchewan.  This confirms the volume transition to accessing cheaper new crop.  Instances of localized $16.50/bu have worked to Morocco and small parcels to US/Canada domestic, Japan and South America.  The volume focus is on new crop where Italy has been a buyer of 2 CWAD equivalent around $14.50/bu delivered Saskatchewan.  8 million North American seeded durum acres is ample for a supply rebuild if yield and quality normalize.  In the meantime, if adversity happens, new crop should converge higher with old crop.  If not, old crop should converge lower with new crop.

We first need to define Canada production in a wide range of views.  Then understand how much French wheat is of low Falling Number, how much can be obtained from droughty Kazakhstan and deep within obscure places like India.  Then determine Australian & Mexican availability.  Then go down path of substitution, like in Algeria, the more baguette versus couscous debate, or in Turkey that will use more soft wheat and export more product with a changed box label.  All in the confines of trying to understand perception, emotion and timing of risk management, behavior that has little to do with a supply/demand.  Keep in mind that the CWB is not around to make discretionary decisions, all of which combined means throw out the durum rule book.  It is being re-written.  It’s a radically different outcome when were talking about a volume problem year.  If would like more detail, please send me an email.