Commercial demand, spillover support lift flax

Flax prices in Western Canada have been pushed higher over the past month by commercial demand and spillover support from strength in outside oilseed markets.

“Prices seemed to have taken a quick little spike upwards and now they’re sitting there,” said Paul Martens, head of operations for Prairie Flax Products at Portage La Prairie, Man.

The rise in price seems to have been caused by a push by a few of the large grain companies who were likely short on flax supplies and needed to cover sales commitments, Martens said.

Flax is also benefiting from the uptick seen over the past month in other oilseed markets, mainly canola.

This is not typically the time of year when export demand drives flax prices higher, which suggests that the market is being assisted by spillover support, Martens said.

As for the 2009-10 flax crop, Martens said he’s skeptical that the late seeding start will drive flax acres in Canada up significantly.

Certainly some producers will switch to flax because they were not able to seed longer-season crops, but on the other hand, farmers are worried about the potential for early frosts and the damage that would cause to their flax crop.

Farmers in areas of Manitoba that are still wet will have to wait a while longer before they get onto their fields and the delay could mean they are too late to seed anything but cereal crops that can be sold as feed.

“If flax catches a frost, it would be disastrous. Worse-case scenario, guys can plant barley or wheat, which they can always use for feed,” Martens said.

As of June 2, old-crop flax prices (delivered to elevator) ranged from $10.42 to $12 a bushel in Saskatchewan, from $11.05 to $11.78 a bushel in Manitoba and from $10.57 to $11.20 a bushel in Alberta, according to prices collected by Prairie Ag Hotwire.

That’s anywhere from three cents to $1.75 a bushel higher compared to month-ago prices.

New-crop flax prices were only available for Saskatchewan and ranged from $8.80 to $11.50 a bushel.

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