Durum strategies

Durum is a dog, both in price and in movement. The Canadian Wheat Board accepted only 40 per cent of the durum offered under the Series A contract. Although it will be a while before we know the acceptance level under Series B, there’s likely to be 30 or 35 per cent of the durum left in the bin at the end of the crop year. I know of some producers who have been selling durum into the domestic feed market. It’s rare for top grade durum to be used for livestock feed, but some producers need the cash flow and / or bin space. For them, holding thousands or even tens of thousands of bushels is not a palatable option. Some other producers don’t want to sell at these depressed prices anyway. They’re all right with holding durum because they know that eventually the price will be a lot better. That won’t happen this crop year and it may not happen next crop year, but prices can’t stay rock bottom forever. For a majority of durum producers, the magnitude of the storage issue will depend on what happens with this year’s production. If there’s a good crop and early-season crop movement next fall is slow, there will be some big durum producers scrambling for storage. I’m Kevin Hursh.