Despite production levels which are estimated to have increased 36% from 2012/13 levels, current forecasts of 2013/14 indicate only a modest growth in ending stocks of 29,000 metric tonnes to 100,000 mt, while the ending stocks as a percentage of demand, or the stocks-to-use ratio, is forecast to rise from 12.5% to 15.6%, based on supply and demand forecasts from Agriculture and Agri Food Canada.
The key to this is a 19.5% increase in forecast exports to 575,000 mt, which would be the highest export volume moved since 2009/10 when 771,700 mt were reported by Statistics Canada as this country's exports. In 2012/13, 481,200 mt were exported, with Grain Commission Statistics showing roughly one-third of the exports through licensed facilities moving to Belgium, while roughly one-third went to China and a similar volume moving to the U.S.
As of the week 16 Grain Statistics Weekly, producer deliveries have totaled 159,450 mt, which is 55.6% ahead of year ago deliveries and the highest year-to-date flax deliveries into licensed facilities since 2009. Exports from licensed facilities are reported at 80,480 mt, 76% ahead of the 45,800 mt exported as of the same week one year ago, although below the steady pace required to meet the 575,000 metric tonne target forecast by AAFC. As of the CGC's October Exports of Canadian Grains and Wheat Flour report, only China and the U.S. have been shipped Canadian flax.
The price forecast for the year released by AAFC is a range of $500 to $540/mt. The most recent delivered Saskatoon bid reported by Saskatchewan Agriculture is $526.37/mt as of Nov 20. Since September, this price has dipped as low as $515.44/mt, while testing the $536-$537/mt range on the weeks of September 18 and then again in the week of Nov. 6. A positive sign will be further import interest from Europe and a break above the $536 to $537/mt range.
Cliff Jamieson can be reached at email@example.com
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