WESTERN PRODUCER — The European Union can be added to the list of traditional customers that are going to require ample supplies of durum in 2022-23.
The European Commission is forecasting 7.5 million tonnes of production for the region, which isn’t bad but is below average.
The EU is beginning the year with a paltry 500,000 tonnes of carry-in and will finish with an abysmal 100,000 tonnes of carryout, according to the EC. That is a fraction of the usual carryout of around two million tonnes.
“I don’t think they can carry out that little amount of durum,” said MarketsFarm analyst Bruce Burnett.
He noted the EC’s production estimate was made on March 15. Since then, serious dryness has developed in Spain and France.
“I think they’re in trouble, especially given the heat that region has had this past couple of weeks,” he said.
Conditions are better in other major durum growing regions like Sicily, southern Italy and Greece.
Burnett believes the final production number will dip below 7.5 million tonnes, which will make the balance sheet even tighter.
The EC is forecasting 2.3 million tonnes of durum imports, which is slightly above the previous five-year average of 2.08 million tonnes.
“They will probably have more imports than they’re indicating,” he said.
Burnett believes the number will need to rise another 300,000 tonnes or so to create an adequate supply cushion, maybe even more if EU yields prove disappointing.
Fortunately, there should be adequate global supplies to accommodate that extra demand due to big crops planned for Canada and the United States.
U.S. farmers plan to seed 1.78 million acres of durum, a nine percent increase over last year. Statistics Canada is forecasting that Canadian farmers will plant 6.06 million tonnes of durum, a one percent hike.
Durum prices have tumbled of late, following other wheat prices down. There has also been pressure from Mexican new crop durum hitting the market. It is an irrigated crop, so production is always good in that country.
Burnett said durum’s price premium over spring wheat is good enough that it will encourage Canadian farmers to plant ample acres, although he believes the number will come in closer to 5.8 million acres.
The majority of the EU’s imports come from North America, with a little bit sprinkled in from Russia and Kazakhstan.
The EU keeps the good quality product from North America and exports lower-quality durum to North Africa.
The EC is forecasting 900,000 tonnes of exports, which is slightly below the average of 1.04 million tonnes.
Much of the EU’s durum market outlook hinges on weather conditions in June when the bulk of the crop is harvested. Rain at the wrong time could cause quality problems, as happened in 2021.
“Everybody will be watching that,” said Burnett.
North Africa is also in the spotlight. It is poised to have yet another disappointing harvest. GEOGLAM Crop Monitor is forecasting below-average yields for Algeria, Tunisia and parts of Morocco due to dry conditions.
Morocco had a crop disaster last year, which is one reason Canadian durum movement has been so strong in 2022-23, with 4.04 million tonnes shipped through week 38.
DTN analyst Cliff Jamieson said that is 530,500 tonnes higher than the pace required to meet Agriculture Canada’s full-year forecast of 4.8 million tonnes.
Either exports will need to be curtailed through the end of July or there is more durum out there than Agriculture Canada is estimating, Jamieson wrote in a recent column.
Commercial stocks for week 38 were 479,800 tonnes, the lowest level for that week in 10 years.
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