Cumulative data for the first half of the 2019-20 crop year (August-through-January) shows Canada's total flax exports at 131,594 metric tons, down 41% from the same period in 2018-19 and 55% below the five-year average for this period. This is shown of the attached chart with the black line representing the 2019-20 trend, the brown line representing 2018-19 and the shaded green are representing the five-year average.
The Canadian Grain Commission's January Exports of Canadian Grain and Wheat Flour report shows August-through-January exports through licensed facilities to Europe slightly higher than the previous year, while shipments to China were 52% lower than the same six-month period in 2018-19 and sales to the U.S. were reported 32% lower than realized in 2018-19. A combination of the coronavirus and its effects on global shipping, along with competition from Black Sea nations, have weighed on Canada's potential into China this crop year.
As of the CGC's week 30 data, covering the week ending March 1, licensed exports were reported at 97,900 metric tons, which is down 32.2% from the same period in 2018-19 and 49.4% below the five-year average for this period. Over the past five years, an average of 34.4% of total exports were achieved in the first 30 weeks of the crop year, a pace that projects forward to 285,000 mt of exports for the entire crop year, which would be well-below the 465,900 mt exported in 2018-19 and the most recent AAFC forecast of 400,000 mt.
Commercial stocks for the most recent week 30 are reported at 42,900 mt, down only 6,700 mt from the same week in 2018-19 but 23,400 mt below the previous three-year average.
Based on Statistics Canada estimates, crop year supplies are estimated at 556,000 mt by AAFC, which is the lowest estimated supplies in data going back to 1996/97, while 36% below the five-year average.
Despite the slow pace of movement, the tighter supplies continue to support prices. Saskatchewan Agriculture's weekly average cash price was reported at $522.64/mt as of week 10 of 2019 or the week ending March 4, just pennies away from the crop year highs reported in February. This is the highest bid reported for this week in four years, while $39.63/mt or $1/bushel higher than the five-year average for this week.
In three of the past five crop years, the crop year high cash price reported by Saskatchewan Agriculture fell between August and February, ranging from $499.88/mt to $564.88/mt. Over the past two years, the crop year high was reached later in the crop year, reaching a high of $524.28/mt in the month of May 2019 of the 2018-19 crop year and a high of $484.12/mt in July 2018 of the 2017-18 crop year. The current bid of $522.64/mt is $2.08/mt higher than the average of the crop year highs realized over the past five years.
This also compares to the estimated range of producer returns shown by AAFC to range from $485 to $515/mt for 2019-20 and to rise to $490 to $530/mt for 2020-21, while these ranges face potential risk of the macro events facing global markets.
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Cliff Jamieson can be reached at firstname.lastname@example.org
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