(Resource News International) — Cash bids for flaxseed in Western Canada have been holding steady at firm levels, but with the harvest now completed and demand slowly declining, prices were expected to begin softening.
“Some of the strength that developed in flaxseed was related to concerns about the harvest and the amount of flax that was left out in swath,” said Richard Zacharias, general manager of Prairie Flax Products at Portage la Prairie, Man. “Concerns about how wet the flax in swath was also contributed to some of the strength.”
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The reluctance of producers to deliver to the elevator system also provided a firm floor for flax bids to some extent.
However, with a few weeks of nice weather, the harvest is virtually complete.
“It appears that the harvest went a lot smoother than had been anticipated and that the crop came off a lot drier than anticipated,” Zacharias said. Yields in quite a few locations were also better than anticipated.”
This would eventually allow cash bids for flaxseed to begin to erode again, he said.
“One also has to remember that Canada’s flaxseed shipments to Europe have been suspended indefinitely and that continues to be a huge bearish factor hanging over the market,” Zacharias said.
He acknowledged shipments to Europe would already have been covered by now had they been able to be made, given that the St. Lawrence Seaway system is set to close down at Christmas time until sometime in the spring.
There are a few outlets which are still moving flaxseed, he said, but those shipments are going to locations such as Mexico and China, where the issue is not so much GM-related but rather price-sensitive.
Cash bids for flaxseed delivered to the elevator in Saskatchewan, based on data from Prairie Ag Hotwire, currently range from $8.25 to $8.51 a bushel, in Manitoba from $8.56 to $9.04 and in Alberta from $7.67 to $8.53.
At the end of October, cash bids for flaxseed, delivered to the elevator in Saskatchewan, ranged from $7 to $7.50 a bushel, in Manitoba from $8.35 to $8.55 and in Alberta from $7.92 to $8.13.
