Cash bids for flax in Western Canada have remained flat, as a lack of demand has prevented prices from moving to higher ground, an industry official said.
Grant Fehr, flax and special crops manager with Keystone Grain at Winkler, Man., said some key exporters of Canadian flax haven’t been in the game yet this year.
“Europe is basically out of the marketplace, except for golden flax, because they’re being supplied from Eastern Europe,” Fehr said. “And, we haven’t seen any activity out of China yet.”
The Pacific Rim, which is normally a big buyer of Canadian flax, also hasn’t had a presence in the market because those nations seem to have pretty full stockpiles of old crop, Fehr said.
Western Canadian flax prices have failed to rally alongside other Canadian grains, including corn and soybeans, because of the lack of demand, Fehr said.
A recent drought across growing regions in the U.S. Midwest caused a lot of damage to crops there, which sparked a rally in U.S. prices, which has spilled over to support many Canadian grain prices.
Though prices have been flat over the last 12 months or so, they still remain above long-term averages, Fehr said.
“Our prices aren’t even close to the 10-year average, they’re way higher,” Fehr said. “And, we’re probably a little higher than the three-year average.”
Flax cash bids in Western Canada ranged between $13 and $13.75 per bushel, as of Wednesday, according to data from Prairie Ag Hotwire. This compares to year-ago prices ranging between $12.81 and $13.50 per bushel.
Fehr said the future of the western Canadian flax market is uncertain right now, because it will depend on a lot of factors that are still unknown.
“It’s all going to depend on how the crop is going to come off and what kind of tonnage we’re going to see and, of course, demand,” he said.
The harvest of flax is in its early stages in Manitoba, and hasn’t started yet in Saskatchewan. There were no reports of yields in Manitoba as of Thursday, Fehr said.
– Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.