Flax prices in the month of August were slightly higher as the market started to pricing in a smaller Canadian crop and stronger exports.

For August, flax prices closed at an average delivered price to Saskatchewan elevators of $12.14 CAD per bushel ($9.34 USD per bushel). This is nearly 2% higher compared to the month of July, and nearly 7% higher than at this time a year ago.

Compared to the 5-year average for the month of August, flax prices are down 1%.

For our GrainCents readers, we’re watching a variety of factors that might affect flax prices: 3 are bearish, 1 is bullish, and 1 is noise.

(If you’re not familiar with what “noise” is, then we recommend you check out our GrainCents risk management process towards flax prices.)

This month, GrainCents investigated topics such as:

• Strong demand for flax from China,
• Fake news in the flax markets, and
• StatsCan’s estimates for Canadian 2018/19 flax production.

Late last week, Saskatchewan Agriculture provided their first estimate of the province’s yield, calling for 21 bushels per acre of flax. This is 1.2% above last year’s Saskatchewan yield for flax of 19.8 bushels per acre. The 5-year average yield for flax in Saskatchewan is 23.6 bushels per acre, meaning that despite being an improvement from last year, we are still a bit below the average.

Generally speaking, producer reports continue to suggest that yields will end up below last year’s numbers.

Nationally, Statistics Canada said on Friday that Canadian flax yields would come in at 23 bushels per acre this year. According to StatsCan, this would equate to total production number of 493,700 MT this year. This is clearly bullish relative to last year’s production number of 555,000 MT, and the 5-year average of 741,000 MT.

One thing we obviously need to keep in mind though is that this production estimate from StatsCan doesn’t really account for the heat that hit most of the Canadian Prairies. That in mind, from the August production estimate to the final report in December, the StatsCan number for flax tends to climb by nearly 6%.

To follow along with our monitoring of the flax prices and markets (and making more sense of grain markets in general), join us for your free trial at GrainCents.