CNS Canada — The relative strength in flaxseed bids, recent uncertainty in other cropping options and a general need to mitigate risk could see a few more acres sway towards the oilseed in Western Canada this spring, according to some market watchers.
Statistics Canada recently forecast flaxseed plantings for 2015-16 at 1.63 million acres, which would be up from the 1.555 million acres seeded the previous year and the largest acreage base since 2009.
However, ahead of that report, many industry participants had been anticipating an even larger flaxseed number.
“The StatsCan acreage number is understated,” said analyst Mike Jubinville of ProFarmer Canada. Fall delivery bids, recently hitting highs of $12.50 per bushel, could still help push flaxseed area to the two million-acre mark.
Flaxseed broker Grant Fehr of Legumex Walker at Morden, Man. said he was initially expecting two million acres of flaxseed as well, but now estimated actual area will likely end up closer to 1.75 million acres — still a sizeable increase on the year.
“Contracting prices have been pretty decent, and it’s a low-cost item to grow,” said Fehr, noting “it’s all about risk mitigation.”
“It’s a hardy crop and not that expensive to grow,” said Jubinville, adding that flaxseed has been “somewhat immune” to the price pressures seen in other crops such as canola and wheat.
After two years of tight ending stocks, he said, flaxseed could finally be at the point of rebuilding supplies. That doesn’t necessarily mean that prices will suddenly fall away, as the market will now be watching the weather through the growing season.
Competitors in Eastern Europe and the former Soviet Union are also expected to be growing more flax, but just how much remains to be seen.
Even with bigger crops out of that region of the world, Fehr noted, end users would still be looking to Canada for its crop’s quality.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.