Audio script:

Hello and welcome to the third episode of the Pasta Parcel, a quick recap of the global and domestic Durum markets. My name is Sam Toll, today I’m coming to you from our Moama office on the Victoria and NSW border. Unfortunately, no paddock news today given both regional Victoria and NSW are in lockdown.

Just quickly on crop conditions up in the north of NSW, things have dried out a little over the last 4 or 5 weeks from obviously what has been a very wet winter and crops have struggled with those conditions. Although, in saying that, in the last 24 hours the Central West and Northern NSW has seen, you know, another 25-30mm of rain event, so things are obviously going to be wet up there again at the moment.

The sowing window on Durum has now closed. Looking at our supply numbers, we do believe, and feedback from growers is that Durum planted hectares this year will be down quite considerably on last year, and that’s purely an agronomic and rotational issue for most growers. I think also, just on a general level on milling wheats and Durum wheat we do expect to see protein levels well down on last year given it was such a huge crop in NSW.

In the international side of things, particularly in North America, the drought conditions that everyone’s been reading about over the last two months there have continued right through to harvest. The USDA, I think they’re suggesting the Durum harvest is roughly 50-60% through. Quality actually and the yield has probably been a little bit better than what was expected albeit, you know, yields are going to be well down year on year given those drought conditions.

North up into Canada. The Durum areas have been really hard hit by the drought conditions, many industry analysts over there are suggesting production could be down as high as 30-40% year on year. I think last year the Canadians grew 6.5 million tonne Durum crop. This year the number is still unknown, but it could be as low as a 3.5-4 million tonne crop. So a significant reduction given the Canadians are the worlds biggest exporters of Durum globally.

In Europe, just quickly, they’re well through their harvest at the moment, particularly in France at the moment which is one of the big European producers. They have had wet conditions right through harvest which has impacted on quality. So at the moment, we’re seeing a bit of a double whammy of big production issues this year in North America and quality issues in Europe. Which is obviously leading to what we’re seeing in our domestic prices here at the moment.

On the flip side, on the demand side of things, we are reading that pasta manufacturers are dealing with large inventories at the moment with the COVID situation. So we’re seeing both those factors at play now, although in saying that, we do believe prices will be well supported well into next year, just with the current production situation.

Domestic Durum values here at the moment are pretty much moving in lock step with these global moves. I think when Jaimee Maunder did our first recap back in mid June, our prices since then have rallied pretty close to $100 per tonne, so it’s been a significant step up. Really over the last 8 weeks all due to production issues coming out of the northern hemisphere.

Just quickly on prices today, (Ref old crop prices) our Moree site in NSW, DR1 I think will be around a $420 mark and delivered Newcastle prices for DR1 for a January-March delivery period are around that $475 price. For new crop prices today, Moree DR1 is $453 and DR1 delivered Newcastle Jan-Mar is $494. 

And just as a foot note, you know DR2 and DR3 spreads are very tight this year from what we normally see and again, that’s just purely reflecting the lack of actual global production of Durum.

That’s about all we have for today. We’ll be back in mid September for another Durum wrap. Thanks for your time and have a good day.