CANADA DURUM WHEAT OCTOBER OUTLOOK:

For 2017-18, production is estimated to fall by 45% from 2016-17 to 4.3 Mt, according to Statistics Canada’s second production estimate, as the 16% decrease in seeded area was compounded by lower than trend yields resulting from low precipitation in the durum growing areas. The second production estimate was 0.4 Mt higher than the first as yields were better than was expected before the harvest started. Production estimates by province, with 2016-17 production in brackets, are: Saskatchewan 3,230 thousand tonnes (kt) (6,178 kt) and Alberta 1,069 kt (1,584 kt). Supply is estimated to decrease by 30% as higher carry-in stocks partly offset the fall in production. Although demand is expected to be strong, exports will be limited by the lower supply and are forecast to rise only slightly to 4.6 Mt. The forecast for exports is 0.4 Mt higher than in the September report because of the increased production estimate from Statistics Canada. Feed, waste and dockage is expected to fall sharply due to the lower supply and a return to normal quality. Carry-out stocks are forecast to fall by 57% to 0.8 Mt, 41% lower than the past five-year average of 1.36 Mt. Based on the supply and demand forecast from the International Grains Council, world durum production is forecast to fall by 3.5 Mt from 2016-17 to 36.3 Mt, while supply falls by 3.5 Mt to 46.5 Mt. Use is expected to decrease by 2.1 Mt to 37.7 Mt as higher food use is more than offset by lower feed use. Carry-out stocks are forecast to fall by 1.3 Mt to 8 Mt. Durum production in the US is estimated to fall from 2.83 Mt for 2016-17 to 1.49 Mt due to a 20% decrease in seeded area and lower yields resulting from drought in the spring durum growing areas. The average Canadian crop year producer price for durum is forecast to be similar to 2016-17 as support from the lower world, Canadian and US durum supply is offset by the better average quality of the Canadian durum crop and the stronger Canadian dollar.