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Durum Market OutlookInternational Grain Summit 2015Milan, ItalyMay 8th, 2015
Big Picture: Grains and Oilseeds• Highly variable global economy,
• Record oilseed (soybeans) production and ending
stocks,
• Coarse grains are ample; absolute abundance
with record global corn production and building
global stocks,
• Index and hedge funds favouring equities over
commodities,
• Ocean freight a non-factor, Baltic Index has
bounced off of record lows.
World Wheat • Broader fundamentals are not supportive of
higher prices (particularly corn/soybeans supply
and demand balances – no outside support for
wheat forecast without weather failure),
• Winter wheat weather issues in parts of Russia
and (most significantly) in U.S. HRW areas,
• Little evidence of imminent and significant
incremental demand in the either the remainder
of the 2014-15 or in the 2015-16 marketing years.
Durum Wheat Market: review
• 2014-15 featured a large divergence
between wheat and durum,
• Quality issues in EU and Canada,
• Widened price gap between quality
specifications,
• Demand worked out a “strategy” after an
initial “panic”,
• Price collapse in 2nd half of the marketing
year.
Durum Wheat Market: 2015-16
• Production prospects appear favourable,
• Expanded acres in Canada,
• Better growing season (thus far) in EU,
• Solid season in North Africa,
• Carry-in stocks lower quality suggests there
will be some interest in ownership of quality
going into harvest season in North America,
• Prices will be under pressure (big picture
and little picture).
2015-16 Big Picture Outlook
973.500991.922988.701867.996888.072
835.324824.924799.712795.539716.621700.696716.804
705.700726.452716.823
658.715695.950
649.709686.810683.877
612.651
596.532618.875626.705
308.000315.462
283.626
268.771240.493
264.246260.556212.084
219.017
236.309220.870215.896
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
1.600.000
1.800.000
2.000.000
tho
usa
nd
to
nn
es
World Production: corn, soybeans, wheat
Corn Wheat Soybeans
705.700726.452716.823
658.715695.950
649.709686.810683.877
612.651596.532618.875626.705
0
100.000
200.000
300.000
400.000
500.000
600.000
700.000
800.000
tho
usa
nd
to
nn
es
World Production: wheat
191.956188.456170.839
135.427132.161127.613144.158145.303
129.912109.371
123.498131.126
187.908197.208
186.573
175.593196.841198.046
201.899169.302
129.692
134.789
154.731157.543
103.55389.553
66.316
57.395
54.45270.72160.642
43.132
52.57663.007
53.95048.666
0
50.000
100.000
150.000
200.000
250.000
300.000
350.000
400.000
450.000
500.000
tho
usa
nd
to
nn
es
World Ending Stocks: corn, soybeans, wheat
Corn Wheat Soybeans
million tonnes 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 5-year Avg.
Area (mil. ha) 16.1 16.5 17.2 17.4 17.2 17.2 16.9
Yield (MT/ha) 2.14 2.22 2.05 2.19 2.01 2.08 2.12
Carry-in 10.1 7.5 7.3 6.6 7.4 4.5 7.8
Production 34.9 36.7 35.2 37.9 32.8 35.7 35.5
Total Supply 45.0 44.2 42.5 44.5 40.2 40.2 43.3
Domestic Use 37.5 36.9 35.9 37.1 35.7 36.0 36.6
(Feed/Residual) 2.7 2.0 1.8 2.0 1.2 1.6 1.9
Exports 7.3 7.4 7.4 8.1 8.7 8.1 7.8
Carry-Out 7.5 7.3 6.6 7.4 4.5 4.2 6.7
* - estimate IGC/MRS
World Durum Supply and Demand (million tonnes)
2013-14 2014-15 % δ 2015-16 % δ
Area (mil. ha) 17.4 17.2 -1.1% 17.2 0.0%
Yield (MT/ha) 2.19 2.01 -8.1% 2.08 3.2%
Carry-in 6.6 7.4 12.1% 4.5 -39.2%
Production 37.9 32.8 -13.5% 35.7 8.8%
Total Supply 44.5 40.2 -9.7% 40.2 0.0%
Domestic Use 37.1 35.7 -3.8% 36.0 0.8%
(Feed/Residual) 2.0 1.2 -40.0% 1.6 33.3%
Exports 8.1 8.7 7.4% 8.1 -6.9%
Carry-Out 7.4 4.5 -39.2% 4.2 -6.7%
δ - denote year over year change IGC/MRS
World Durum Supply and Demand (million tonnes)
2015-16 Canadian Durum Outlook
Western Canada Winter Moisture
Percentile
November 1 – March 18, 2015
Western Canada Winter Moisture
Percentile
November 1 – March 31, 2015
Western Canada Temperature
Monthly deviation from average
March 2015
Western Canada Seeding ProgressMay 4, 2015
MB SK AB W. Can.Spring wheat 41 25 43 34Durum 36 33 46 34Oats 9 4 16 8Barley 18 11 29 22Flax 0 0 0 0Canola 18 12 19 15Peas 51 33 59 41All Crops 27 19 32 24
Normal 16 9 12 12Last year 0 0 0 0Last week 3 6 8 6
0
20
40
60
80
100
20-apr 27-apr 04-mag 11-mag 18-mag 25-mag 01-giu 08-giu 15-giu 22-giu
Pe
r ce
nt
com
ple
te
Western Canada Seeding Progress
2014 2015
Normal
Western Canada Sown Area(million acres)
2009-14 Stats. Can. Stats. Can. CWB MR % Change Apr-15
Avg. 2013 2014 2015 2015/14 Stats Can
All Wheat 22.20 24.94 23.12 23.81 3.0% 23.85
Spring Wheat 16.95 18.83 17.31 17.54 1.3% 17.68
CWRS 14.97 15.93 14.98 14.95 -0.2%
Durum 4.31 4.96 4.75 5.70 20.0% 5.50 Winter Wheat 0.94 1.16 1.06 0.57 -46.2% 0.57Oats 2.63 2.86 2.48 3.40 37.2% 3.24Barley 6.33 6.70 5.44 6.35 16.7% 6.15
Rye 0.23 0.23 0.21 0.22 4.8% 0.22
Flax (incl. Solin) 1.03 1.04 1.56 1.65 6.1% 1.63
Canola 19.39 19.84 20.26 19.20 -5.2% 19.34
Six Major Grains 51.81 55.59 53.06 54.63 3.0% 54.43
Peas 3.24 3.29 3.80 4.13 8.7% 3.83
Lentils 2.62 2.39 3.11 3.45 10.9% 3.35
Soybeans 1.02 1.22 1.54 1.70 10.4% 1.64
Western Canada Grain Production(million tonnes)
2009-14 Stats. Can. Stats. Can. CWB MR % Change
Avg. 2013 2014 2015 2015/14
All Wheat 26.20 34.90 27.28 26.66 -2.3%
Spring Wheat 20.25 26.93 20.88 20.32 -2.7%
CWRS 17.28 21.96 17.55 16.46 -6.2%
Durum 4.70 6.50 5.19 5.42 4.4%
Winter Wheat 1.26 1.47 1.20 0.92 -23.6%
Oats 2.62 3.61 2.62 3.14 20.0%
Barley 7.65 9.74 6.70 7.77 16.0%
Rye 0.20 0.17 0.15 0.19 20.4%
Flax (incl. Solin) 0.57 0.71 0.85 0.95 11.7%
Canola 14.48 17.86 15.50 14.73 -5.0%Six Major Grains 51.72 66.99 53.09 53.43 0.6%
Peas 3.04 3.93 3.44 3.50 1.6%
Lentils 1.61 1.72 1.84 2.05 11.6%Soybean 0.81 1.03 1.27 1.62 27.5%
0
10
20
30
40
50
60
70
80
90
100
% o
f C
rop
Durum Quality% of CWAD grading #1 and #2
Average
0
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
7.000.000
2007 2008 2009 2010 2011 2012 2013 2014 2015
So
wn
Are
a (
ac)
Canada Durum Sown Area
Western Canada Projected Durum Wheat Production
2015Production (tonnes)
-8,085
-9,895
8,495
-188
15,929
7,717
19,590
73,921
32,216
28,765
-12,027
9,295
52,600
9,368
13,657
2,074
-24,275
-1,398
Western Canada Durum Wheat Production Change
2015Production (tonnes)
1,000 tonnes 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2015-16 2015-16
Aug - July Stats Can Stats Can Stats Can Stats Can MRS low mid high
Area (mil. ha) 1.28 1.62 1.88 2.00 1.89 2.15 2.27 2.34
Yield (MT/ha) 2.37 2.58 2.46 3.26 2.75 2.25 2.39 2.78
Carry-in 2,694 1,566 1,486 1,152 1,631 949 949 949
Production 3,025 4,172 4,627 6,505 5,193 4,838 5,420 6,505
Total Supply 5,755 5,755 6,149 7,661 6,839 5,887 6,384 7,554
Domestic Use 886 686 752 957 920 750 810 970
(Feed/Residual) 477 279 332 532 495 345 385 540
Exports 3,303 3,583 4,245 5,073 4,970 4,450 4,700 5,000
Carry-Out 1,566 1,486 1,152 1,631 949 686 874 1,584
* - estimate
Canada Durum Supply and Demand (thousand tonnes)
Statistics Canada/MRS
2013-14 2014-15 δ 2015-16 δ
Area (mil. ha) 2.00 1.89 -0.11 2.27 0.38
Yield (MT/ha) 3.26 2.75 -0.50 2.39 -0.37
Carry-in 1,152 1,631 479 949 -682
Production 6,505 5,193 -1,312 5,420 227
Total Supply 7,661 6,839 -822 6,384 -455
Domestic Use 957 920 -37 810 -110
(Feed/Residual) 532 495 -37 385 -110
Exports 5,073 4,970 -103 4,700 -270
Carry-Out 1,631 949 -682 874 -75
δ - denote year over year change
Canada Durum Supply and Demand (thousand tonnes)
Statistics Canada/CWB*
0
500.000
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
2007 2008 2009 2010 2011 2012 2013 2014 2015
So
wn
Are
a (
ac)
US Durum Sown Area
North Dakota30 Day Precipitation
% of normalEnding May 6, 2015
North Dakota60 Day Precipitation
% of normalEnding April 30, 2015
June - May 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 5-yr Avg.
Area (mil. HA) 1.02 0.53 0.85 0.60 0.56 0.63 0.71
Yield (MT/HA) 2.85 2.59 2.66 2.62 2.56 2.62 2.65
Carry-in 944 949 690 627 600 435 762
Production 2,917 1,374 2,259 1,579 1,442 1,645 1,914
Imports 925 1,007 980 1,197 1,225 1,306 1,067
Total Supply 4,786 3,330 3,928 3,403 3,266 3,387 3,743
Domestic Use 2,667 1,905 2,512 1,960 2,014 2,096 2,212
(Feed/Residual) 191 27 226 27 54 82 105
Exports 1,170 735 789 844 816 735 871
Carry-Out 949 690 627 600 435 557 660
* - estimate USDA/CWB
U.S. Durum Wheat Supply and Demand (1,000 tonnes)
June/May 2013-14 2014-15 δ 2015-16 δ
Area (mil. HA) 0.60 0.56 -0.04 0.63 0.06
Yield (MT/HA) 2.62 2.56 -0.05 2.62 0.06
Carry-in 627 600 -27 435 -164
Production 1,579 1,442 -136 1,645 203
Imports 1,197 1,225 27 1,306 82
Total Supply 3,403 3,266 -137 3,387 121
Domestic Use 1,960 2,014 54 2,096 82
(Feed/Residual) 27 54 27 82 27
Exports 844 816 -27 735 -82
Carry-Out 600 435 -164 557 121
δ - denote year over year change USDA/CWB
U.S. Durum Wheat Supply and Demand (1,000 tonnes)
Europe Vegetation Index
April 11-20, 2015Change from short term average
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 5-year Avg.
Area (mil. ha) 2.89 2.73 2.93 2.81 2.76 2.76 2.82
Yield (MT/ha) 3.14 3.00 2.72 2.94 2.61 2.90 2.88
Carry-in 2,086 1,545 1,420 767 1,024 903 1,368
Production 9,085 8,192 7,975 8,257 7,207 7,996 8,143
Imports 2,100 1,709 1,486 1,921 2,187 1,750 1,881
Total Supply 13,271 11,446 10,881 10,945 10,418 10,649 11,392
Domestic Use 9,700 8,825 8,945 9,050 8,750 8,925 9,054
(Feed/Residual) 1,100 570 536 500 650 650 671
Exports 2,026 1,201 1,169 871 765 890 1,206
Carry-Out 1,545 1,420 767 1,024 903 834 1,131
* - estimate IGC/CWB
EU-27 Durum Supply and Demand (1,000 tonnes)
2013-14 2014-15 δ 2015-16 δ
Area (mil. ha) 2.81 2.76 -0.05 2.76 0.00
Yield (MT/ha) 2.94 2.61 -0.33 2.90 0.29
Carry-in 767 1,024 257 903 -121
Production 8,257 7,207 -1,050 7,996 789
Imports 1,921 2,187 266 1,750 -437
Total Supply 10,945 10,418 -527 10,649 231
Domestic Use 9,050 8,750 -300 8,925 175
(Feed/Residual) 500 650 150 650 0
Exports 871 765 -106 890 125
Carry-Out 1,024 903 -121 834 -69
δ - denote year over year change
EU-27 Durum Supply and Demand (1,000 tonnes)
IGC/CWB
15.02713.738
14.86116.340
13.84215.061
5.723
4.0593.595
2.546
3.2552.287
0
5.000
10.000
15.000
20.000
25.000
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Canada, EU, and U.S. Durum Production and Stocks
Production Carry-in
6.499
5.519
6.2036.788 6.551 6.325
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Canada, EU, and U.S. Exports
Exports
4.059
3.595
2.546
3.255
2.288 2.264
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Canada, EU, and U.S. Durum Ending Stocks
Carry-Out
TurkeyMonthly % of normal
March, 2015
Turkey Vegetation Index
April 21-30, 2015Change from short term average
North Africa Vegetation Index
April 21-30, 2015Change from short term average
North AfricaMonthly % of normal
April, 2015
2011-12 2012-13 2013-14 2014-15 2015-16
Area (mil. ha) 0.35 0.33 0.39 0.40 0.43
Yield (MT/ha) 5.48 5.48 5.79 5.80 5.74
Carry-in 50 185 50 40 45
Production 1,930 1,810 2,260 2,320 2,440
Imports 5 5 5 5 5
Total Supply 1,985 2,000 2,315 2,365 2,490
Domestic Use 1,100 1,150 1,050 1,000 1,025
(Feed/Residual) 475 400 300 200 225
Exports 700 800 1,225 1,320 1,400
Carry-Out 185 50 40 45 65
* - estimate IGC/CWB
Mexico Durum Supply and Demand (1,000 tonnes)
Durum Wheat Market: 2015-16
• Production prospects appear favourable,
• Expanded acres in Canada,
• Better growing season (thus far) in EU,
• Solid season in North Africa,
• Carry-in stocks lower quality suggests there
will be some interest in ownership of quality
going into harvest season in North America,
• Prices will be under pressure (big picture
and little picture).
