March 9, 2000
George Flaskerud, Extension Crops Economist
NDSU Extension Service
The monthly average milling durum price at Minot has been at a premium to the monthly average price for 14-percent spring wheat since April 1999 due to reduced supplies of milling quality durum wheat. The premium in Minot was 74 cents on March 6. Can that premium be maintained into the 2000 crop year harvest?
The current level of durum stocks and use would likely have resulted in a discount for milling durum instead of a premium if the 1999 durum crop had been of normal quality. Ending stocks of durum are projected to be 63 million bushels for the 1999-00 marketing year which ends May 31; total use is projected to be 124 million bushels. Such a high level of ending stocks relative to use has usually resulted in a discount for milling durum in the past.
Looking ahead to the 2000 crop, the milling durum premium is at risk. A normal durum yield could easily result in durum ending stocks for the marketing year 2000-01 exceeding those of the past year. Planted acres of 3.5 million, a crop yielding 29.4 bushels per planted acre and of normal quality, and total use of 128 million bushels could result in ending stocks of 69 million bushels, versus the 63 million projected for the marketing year1999-00.
On the other hand, durum is a crop where a premium can develop very quickly for milling quality if stocks are jeopardized. A crop yielding about 25 bushels per planted acre and of normal quality would likely result in somewhat of a premium over 14-percent spring wheat, if all other supply and demand factors are held constant.
Keeping in mind that other factors are held constant in the analysis, it is likely that this year's premium for milling durum could be maintained if a yield close to 20 bushels per planted acre is the outcome for this year's durum crop.
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Source:
George Flaskerud (701) 231-7377
Editor: Dean Hulse (701) 231-6136