Canada ditched expectations of an increased durum wheat harvest in 2013, putting stocks on course for a multi-year low, citing uncertainty over pricing prospects among farmers keener to lift sowings of other wheat varieties and soybeans.
The country's farm ministry, AAFC, trimmed by 100,000 tonnes to 4.6m tonnes its estimate for the durum crop in Canada, the top exporter of the grain.
The downgrade, which left the harvest some 30,000 tonnes below last year's result, reflected a cut of 40,000 hectares in the forecast for plantings.
"Seeded area is forecast to increase only marginally from 2012-13 as support for a larger area from good [current] prices and low carry-in stocks is expected to be mostly offset by a shortage of price indicators for 2013-14," the ministry said.
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The price uncertainty came despite a forecast that Canada's stocks were now on course provisionally to end 2013-14 at 1.20m tonnes, a historically low figure, and extending a dwindling in inventories from the 2.71m tonnes reached at the close of 2009-10.
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Forecasts for world durum 2013-13 and (year-on-year change)
Production: 36.0m tonnes, (+900,000 tonnes)
Carryout stocks: 7.3m tonnes, (+200,000 tonnes) |
Low inventories in a major trading nation would typically imply elevated prices.
However, premiums for growing the crop, which typically offers a lower yield than conventional wheat, have been relatively low.
Until it changed its price guidance last week, the Canadian Wheat Board, western Canada's former grain monopoly, was giving pricing durum at a discount compared with spring wheat of comparable protein levels.
AAFC sees 2012-13 prices for both grains in line, at Can$275-305 a tonne, compared with a Can$55 a tonne premium durum gained last season.
'Sideways market'
The Canadian Wheat Board said last week that durum prices had been "moving sideways for the most part over the past few months", pressed by supply and demand fundamentals which "have been turning weaker".
"The condition of the durum crop in North Africa has improved considerably since early January and European crops are progressing well," the board said.
Meanwhile, Mexico's harvest, which starts next month, "is set to pressure durum values once export supplies become available in May".
AAFC's revised estimates lowered by 300,000 tonnes, to 900,000 tonnes, the rise in world durum output in 2013-14, an increase attributed mainly to a recovery in Kazakh and Moroccan harvests.
The estimate for world carryout stocks was trimmed by 300,000 tonnes to 7.3m tonnes, only 200,000 tonnes above the five-year low expected at the end of this season.
Wheat plantings
AAFC kept at 8.30m hectares its estimate for Canadian sowings of non-durum wheat, a rise of 7.0% year on year, citing "good prices, low carry-in stocks and a shift out of canola and lentils".
Soybean seedings were seen rising 15% to a record 1.94m hectares, after farmers, growing improved varieties, achieved record yields last year, and thanks to "lower input costs compared to canola and expected attractive prices".