NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665

June 6, 1999

George Flaskerud, Extension Crops Economist
NDSU Extension Service

The durum September futures price generally trended higher during the month of May. The price increased 22 cents between the low of $3.41 on May 5 and the $3.63 close on June 1. Further increases will face technical resistance at the high of $3.77, reached on March 17.

The durum price outperformed the spring wheat price during the same period. On June 1, the spring wheat September futures contract was $3.28, about the same as on May 5.

The durum price improved because of uncertainty in how many acres of durum will be planted. The June 30 Acreage report will give an indication of planted acres. The report may not be completely accurate since planting continues as the survey for the report is being conducted.

Prevented planting could be significant for durum. It is likely that fewer acres will be planted than the 12-percent increase indicated in the March 31 Planting Intentions report. Only 50 percent of the durum in North Dakota was planted as of May 30, versus 96 percent last year, according to USDA's weekly Crop Progress report. The five-year average for that date is 78 percent. If about the same number of acres is planted as a year ago, however, the supply of durum could still be about equal to a year ago because of large carryover stocks.

Planting delays are also being experienced in Canada. As of May 30, 73 percent of the durum was planted in Saskatchewan versus the five-year average of 94 percent, according to Saskatchewan Agriculture and Food's weekly crop report. It is possible that Canadian farmers will plant even fewer acres than they planned in March when they indicated a 28-percent decrease. But, a further decrease in acres and/or a lower-than-normal yield is necessary if their durum supply is to be reduced below that of a year ago. They have large carryover stocks too.

Large carryover stocks in the European Union (EU) could also maintain their durum supply by offsetting production problems. Planted acreage was estimated to be up 13 percent but yields are expected to be down sharply from last year's very good levels, according to the International Grains Council April 29 Grain Market Report.

The U.S., Canadian and EU combined ending stocks for this marketing year could be similar to the year just completed if the possibilities materialize that I have described. In effect, potential production will have to decrease further for prices to increase significantly from where they were on June 1.

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Source: George Flaskerud (701) 231-7377

Editor: Dean Hulse (701) 231-6136