Rain-slowed harvest boosts Canada's durum wheat prices


Canadian export giant G3 hiked its durum wheat price forecast despite growing expectations for record domestic output, as wet weather exacerbates quality and harvesting worries which have also fuelled a canola price rebound.

G3, the former grain export monopoly for Canada's important Prairies region, lifted by up to Can$45 a tonne its forecast for prices that farmers receive for selling grain to the group's annual durum pool, taking the forecast for values of highest quality supplies to  Can$380 a tonne.

The upgrade - which means that farmers, who had been looking at prices in line with those last season, are now looking at a healthy increase – reflected the mounting worries over the rain, and snow, which has left growers unable to harvest crop, leaving it at risk of deterioration.

"[Harvest] progress has slowed to a crawl due to the excess moisture that fell across large areas of Alberta and Saskatchewan," said G3, also noting support to prices from broader worries over wheat quality, besides from weakness in the Canadian dollar.

'Grade loss'

Indeed, in Saskatchewan, ag officials last week last week said that harvest of all crops, from barley to wheat, was 82% complete – 17 points behind the five-year average pace.

For durum, of which the harvest was wrapped up by the end of October last year, only 77% of the province's crop had been harvested.

"Continued wet weather has resulted in very little harvest progress since the beginning of October," the Saskatchewan officials said, adding that heavy rains, and snow too, had "lodged" crops – ie pressing them to the ground, and making them difficult to combine.

"Bleaching and sprouting are causing grade loss" too, with wet weather encouraging ripe kernels to sprout in the field, raising the threat of downgrades in specifications.

'Solid buying interest'

Also last week, the International Grains Council cautioned over quality factors, despite upgrading its estimate for the Canadian durum crop by 300,000 tonnes to a record high of 7.3m tones.

The current record, of 6.50m tonnes, was reached in 2013, according to official Canadian data.

Canada's durum harvest "is normally in the final stages, by mid-October, but owing to delays caused by heavy rain and snow around one-quarter remained to be combined this season," the IGC said.

On its data, Canadian durum prices, as measured on a FOB basis at St Lawrence port, had risen $35 a tonne over the past month to $320 a tonne.

"While production was above average in the major exporters, there was sustained underpinning from worries that the quality of some of the crop was disappointing, heightened by adverse weather at the end of Canada's harvest.," the council said.

"Expectations for solid underlying buying interest from North Africa continued to support durum export quotations."

Export forecasts

The IGC trimmed its forecast for Canadian durum exports in 2016-17 by 100,000 tonnes to 5.2m tonnes despite the increased harvest estimate.

Still, this would represent a rise of 700,000 tonnes year on year, and represent well over half the global shipments of 9.0m tonnes expected for the season.


Readers choice: TOP-5 articles of the month by UkrAgroConsult