On Friday, May 11, we got Statistics Canada’s estimates for grain stocks through March 31st, 2018. Specifically, for flax, there is still 327,000 tonnes of the oilseed available in Canada as of the end of the first calendar quarter. This is down 22% year-over-year and 20% less than the five-year average.
Flax held on farm still is sitting at 261,000 tonnes. This is 24% less than last year’s 341,000 tonnes held by farmers, but also 19%% lower than the five-year average. Comparatively, flax held in commercial storage as of March 31st came in at 66,000 tonnes, 24% below the five-year average.
The StatsCan report can be viewed as bullish. Generally speaking, the upside price potential for flax is gaining more support.
Cumulative flax exports are tracking last year’s pace. It is a rough indication that US crushers are pulling more flax from across the border in Canada.
This week’s Saskatchewan crop report showed 9% of all crops are in the ground thus far. While it’s indeed progress, this is behind the 5-year average of 19% and last year’s progress of 11% planted. Specific estimates on the flax planting progress in Saskatchewan were not reported this week but for perspective, just 30% of Saskatchewan’s flax crop was seeded by the May long weekend in 2013 (a year we’re comparing seeding progress to today because of the similar late start that year).
The Manitoba government released their first crop report of the year this past Monday and showed significant progress as the weather has been fairly cooperative. While no specific numbers for flax are available, FarmLead user reports continue to suggest that a rain will be needed soon in the Keystone province.
Next door in Alberta, through May 8th, roughly 8% of all crops have been seeded, up from less than 1% reported last week. Back in 2013, 2.2% of the flax crop was the ground by now but nothing has been seeded yet. Can we get to 2/3s of the Alberta flax crop seeded by May long weekend like we saw in 2013?
To sum up, the outlook for the old-crop flax has turned a bit bullish this week. StatsCan confirmed tight ending stocks. Flax exports are trending higher. Seeding is a bit behind schedule. We expect that old-crop flax prices could tick higher in the next couple of weeks. If accurate, we could catch up on the old-crop flax sales so be mindful of these opportunities.
On the sales recommendation front, we remain patient at 50% old on 2017/18 old crop and 0% sold on 2018/19 new crop. We’re still looking for that competitive new crop bid to pop up to make our first sale for 2018/19.
Have a great week!
– Brennan, Garrett, and Adrian
May 10 – An Estimated 109,893 MT of US Flax Production in 2018/19
May 6 – Flax Weekly GrainCents Digest
April 29 – Flax Weekly GrainCents Digest
April 27 – StatsCan Expects 982,200 Acres of Flaxseed in Canada in 2018/19
April 24 – A Peek At Two Major Flax Export Competitors