CANADA DURUM WHEAT AUGUST OUTLOOK:

For 2016-17, exports are forecast to decrease by 1% from 2015-16 to 4.5 million tonnes (Mt). The export forecast includes some exports (0.17 Mt) to the United States (US), which are not included in the Canadian Grain Commission (CGC) weekly export data, and exports of semolina of 0.04 Mt. Canadian domestic food use of durum is forecast to be the same as for 2016-17 at 0.18 Mt. A much larger portion of the crop is expected to end up as feed, waste and dockage, which is calculated residually, because of the large supply of low quality durum. Carry-out stocks are forecast to increase by 90% to 2.1 Mt, 71% higher than the past five-year average of 1.28 Mt. Carry-out stocks are expected to consist mostly of lower grade durum. World durum production increased by 0.8 Mt from 2015-16 to 39.9 MT. Supply rose by 2.6 Mt to 49.1 Mt because of higher carry-in stocks. Use is expected to rise by 2.2 Mt to 39.5 Mt and carry-out stocks are forecast to increase by 0.5 Mt to 9.7 Mt. Durum production in the US rose by 0.54 Mt to 2.83 Mt. The average Canadian producer price for the crop was lower than for 2015-16 due to the higher Canadian, US and world supply. For 2017-18, the area seeded to durum in Canada decreased by 16% from 2016-17, according to Statistics Canada’s seeded area report. Production is forecast to fall by 36% to 5 Mt as the decrease in area is compounded by lower than trend yields resulting from low precipitation in the durum growing areas. The current production forecast is 0.7 Mt lower than the July forecast because durum crop conditions have deteriorated since the July report due to low precipitation. Supply is expected to decrease by 20% as higher carry-in stocks partly offset the fall in production. Exports are forecast to rise by 9% due to less competition in world markets from the EU and US because of lower production, and assuming a return to normal quality for the Canadian durum crop. The current exports forecast is 0.2 Mt higher than the July forecast because of the reduced durum production forecast for the US, which is expected to provide additional market opportunities for Canadian exporters. Exports will be limited by the lower supply. Feed, waste and dockage is expected to fall, assuming a return to normal quality. Carry-out stocks are forecast to fall by 52% to 1 Mt. The revisions for production and exports resulted in a 0.8 Mt drop in the carry-out stocks forecast. Based on the supply and demand forecast from the International Grains Council, world durum production is forecast to fall by 1.9 Mt from 2016-17 to 38 Mt, while supply falls by 1.4 Mt to 47.7 Mt because of higher carry in stocks. Use is expected to decrease by 0.4 Mt to 39.1 Mt and carry-out stocks are forecast to fall by 1 Mt 8.7 Mt. Durum production in the US is forecast to fall by 1.45 Mt to 1.38 Mt due to a 20% decrease in seeded area and lower yields caused by drought. The average Canadian producer price for 2017-18 is forecast to increase from 2016-17 because of the lower world, Canadian and US supply.