Durum market remains quiet in December

With the holiday seasons and the end of the year upon us, that means quiet times for the durum market, as is typical this time of year.

Things have not moved in about a month and cash bids around the state are averaging around $9.50, with a few bids a bit higher by 10-15 cents, and a few a bit lower, according to Erica Olson, market development and research manager for the North Dakota Wheat Commission.

“This is a pretty slow time of the year in the markets generally, so we don’t expect much price movement,” she said, adding that during the holiday season it’s a slow time for news and other market-moving type events, and there are no USDA reports scheduled.

“In terms of grain movements, it’s very cold right now and producers generally are not too excited to haul grain unless they have to when it gets this cold,” she said. “In terms of export demand, that tends to slow down this time of year, as well. The Great Lakes will close soon once they freeze over.”

As of Dec. 19, it did not appear the lakes had closed yet. Last year it was mid-January before they froze over and closed.

In terms of demand, domestic mills seem to have decent coverage through the first quarter of 2023, but then it’s pretty minimal after that.

“It still continues to be bought hand to mouth and also very price dependent,” she said. “We do tend to see prices spike a little when there is demand out there and then come back down.”

In terms of US durum export sales, there was nothing new and no new sales. The US did have a big sale to Algeria earlier in December of over 2.2 million bushels (MB), which was positive, but there haven’t been a lot of sales since, according to Olson.

Algeria has now surpassed Italy as the largest market for US durum, she noted. So far this marketing year, the US has sold a total of 4 MB to Algeria and about 2.7 MB to Italy.

As for total durum sales for the year, the US now stands at just over 8 MB, which is 65 percent higher than last year. But, historically speaking, this is still a fairly slow export pace.

USDA released its December WASDE report (World Agricultural Supply and Demand Estimate) earlier this month. There were no changes to the hard numbers in the report. The US is still at 80 MB for domestic use, 20 MB for exports, and ending stocks are still at 33 MB.

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“The ending stocks number has come up in recent months, so our durum situation is not looking as tight as first expected,” she said.

Looking at the Canadian situation, like the US, their exports are also higher, up 54 percent compared to last year.

“Their volume, however, is a lot bigger than ours at about 63 million bushels. Obviously, they do produce a lot more hard than we do,” she said.

Looking at Canada’s exports by location, they are higher than Italy and Spain, but they are down in Morocco. They have not gotten much Algerian business as the bulk of that has gone to the US in terms of North American exports.

Other than that, Olson said it’s been pretty quiet for Durum.

“The bulk of the world durum production is in the northern hemisphere, so obviously this is a quiet period for any production-related news. All of the harvest is done,” she said.

“Argentina and Australia each produce a small amount of durum, so that would be all that’s left. But, I will say that given the tight world durum stocks, their 2023 production season will be closely watched,” she added.

There are some concerns around the world, however. It’s still dry in some parts of the European Union durum region. And looking at the current Drought Monitor, there are still some lingering dry conditions here in the US and in Canada.

“But it’s too early to worry about that yet, obviously when you look outside, but it’s still something to watch. It was quite dry last fall,” she said.

“In North Africa, where they did struggle with drought conditions this year, there has been some rain in Morocco to alleviate that a little bit, but overall it’s still dry in that region, as well, so there’s a lot to watch going into next year,” she added.

In one more bit of news, Tunisia did tender for 3.5 MB of durum in mid-December. However, there hasn’t been any word regarding the results of that tender yet.

“Unfortunately, it’s not likely to come from the US,” she said. “Other than that, we expect it to be quiet for the next few weeks and we’ll see what 2023 brings.”

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