(Resource News International) — Flaxseed bids in Western Canada have climbed sharply over the past month, as concerns about lost acres in Saskatchewan and damage to crops already in the ground supported values.
Just how high the market goes, however, will depend on production prospects over the summer.
Statistics Canada recently pegged intended flaxseed area in 2010 at 1.285 million acres, which would be well down from the 1.71 million seeded the previous year.
Market participants were anticipating the decline given the problems Canada has had exporting flaxseed to Europe over the past year due to concerns over unapproved genetically-modified material in shipments. However, actual acres will likely be lower still.
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“The question now is: how many acres did go in, and how many are good?” according to flaxseed merchant Grant Fehr of Keystone Grain at Winkler, Man.
Seeded area, he estimated, was likely closer to a million acres. In addition, “What kind of condition are those crops in?” he said, noting that “if we get a couple of 25°C days you can change a crop in a hurry.”
Current flax bids can be found in the $11 per bushel area from line companies in Manitoba, according to Fehr, which compares with $8 per bushel a month ago. He said there were premiums available for higher-quality flaxseed.
“There’s a lot of tire kicking, but nobody’s actually placing an order,” said Fehr.
There was some old crop still moving, he said, as there will be a large carryout. With the uncertain new-crop outlook, he expected there could be more upside in prices, depending on the crop conditions over the summer.
