Canada’s flaxseed stocks are expected to be very tight by the end of the current crop year and should remain that way through 2011-12, but one analyst doesn’t believe that will lead to an immediate jump in cash prices.
Agriculture and Agri-Food Canada has reported end-of-year flaxseed stocks will be just 90,000 tonnes at the end of the 2011-12 crop year, down from its estimate of 130,000 on March 15. Carryout from the current crop year is also expected to be very tight at only 100,000 tonnes.
Chuck Penner, president of Left Field Commodity Research in Winnipeg, said even though supplies are expected to be tight, there has not been a lot of in the way of demand from other areas of the world.
“Exports for this year have been kind of disappointing, and I think that will continue,” Penner said. “There is nothing in the Thunder Bay (shipping) lineup, and I don’t think there is much in the way of product there either. I don’t think there is going to be much happening in the next little while.”
Current elevator deliveries for flax are bringing as much as $13.15 per bushel in Manitoba, $13 per bushel in Saskatchewan, and $12.78 per bushel in Alberta, according to Prairie Ag Hotwire.
Prices had eclipsed C$15 per bushel earlier in the year, and Penner said he doesn’t expect producers will be eager to sell at the current price levels.
“I think the guys who have product are hoping for more (higher prices). There may be some short-term opportunities if a boat has to be filled, but I think guys will wait to sell,” he said. Penner said he had heard some bids were getting as much as $14 per bushel.
Asked if the wet spring seeding conditions across the Prairies could limit production — and, ultimately, stocks — Penner said, “It could yet, but flax tends to get seeded later so I don’t think it will have too much of an effect.”