US wheat futures and global cash prices were lower overnight.
US futures found little fundamental support as condition ratings for their spring wheat crop improved, unlike the Canadian crop to their north. Drought monitor maps for Canada show a slight improvement for some parts of the northern cropping districts in Alberta and Saskatchewan where barley and canola are more prolific, but further south across the durum belt conditions remain dire and prices are confirming the poor outlook for Canadian durum. Much of the Canadian durum belt has seen just 40% of average summer rainfall.
Durum prices across SE Saskatchewan were flat to firmer in overnight trade, breaking away from weakness in spring wheat values which fell roughly C$7.43 per tonne for a December lift.
International durum production is expected to slip back to roughly 33mt, some reports suggest as low as 31mt. The latest estimate out of France is again lower, winter durum production there just over 1.2mt. In Italy production was also lower but the major concern is quality. Presently Italy is finding good blending durum from nearby Turkey, which unlike most of Europe actually have a cracking season in the east, producing good yields and reasonable grain. This hasn’t stopped internal prices for durum in Italy from rallying sharply higher though, up to E80.00 per tonne higher in just a few weeks.
On the back of an envelope, Canadian and French durum prices both indicate there is plenty more potential upside in local new crop bids here. Rough conversions indicating we should be able to get close to AUD$600+ at the farm gate if our quality remains good.
As for milling wheat the pressure continues to come from the Black Sea market. Russia has shown little issue with exporting wheat, weekly volume records have fallen throughout 2023. This is good news and does tend to indicate carry over for B/S wheat may not be as high as initially expected.