Canada Markets

Prairie Flax Bids Bounce off Lows

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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The average flax bid of $477.34/mt delivered Saskatchewan plants has recovered from its October lows although remains well below the 2014 high. (DTN graphic by Nick Scalise)

The average Saskatchewan flax bid has recovered from the lows reached in October but the market continues to feel the pressure of the global oilseed market, with the latest price indicated by Statpub.com at $477.34 per metric tonne. Since its May 28 weekly high of $567.01/mt, the price has retraced 62.4% of the crop's 2014 rally to a late September/early October weekly low of $465.31/mt, a 62.4% retracement. Coincidentally, this turnaround took place near the 61.8% retracement which is viewed as a Fibonacci support level.

Prospects for further price improvement may be bleak with current Statistics Canada estimates suggesting Canadian production of 922,000 mt, up 27% from 2013. Meanwhile, the crop will face challenges into the European market with ample supplies available in Eastern Europe. Canola's tight fundamentals which will play a larger role in the second half of the crop year may eventually play a supportive role in boosting flax prices.

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The most recent projections from AAFC suggests that 2014/15 flax exports will reach 800,000 metric tonnes. This would be 184,000 mt higher than 2013/14 and the highest exports achieved since 918,000 mt were exported in the 1997/98 crop year. As of the most recent week 14 data from the Canadian Grain Commission for the week ending November 9, producers have delivered 160,800 mt of seed into licensed elevators this crop year, 33% more than the same week last year. Cumulative exports are also ahead of last year, although shipments from licensed facilities total 49,200 mt, up only 12% from year-ago volumes.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

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