Oilseed linseed carryover stocks in Canada will be record high – forecast

Ag Canada expects Canadian oilseed linseed stocks to total 275,000 tons by the start of the 2023-24 crop year. According to traders, linseed producers should not expect significant price changes in the new season.

Prices have leveled off after falling 36 percent in 2022-23, and that’s probably where they will stay.

“Canada will enter MY 2023-24 with a large amount of ending stocks, which should leave values unchanged for now,” said an industry expert.

Mike Allaire, DG Global’s director for Western Canada, agrees with that assessment.

“Frankly, I don’t see linseed prices changing much at all,” he said.

That’s despite a significant reduction in acreage. Statistics Canada estimates producers planted 609,000 acres to the crop, down 22 percent from last year. That’s the smallest total in 73 years.

Allaire said Canadian prices are down because of “tremendous competition” from the Black Sea region. Black Sea linseed is being sold to China at a discount of $70 to $80 compared to Canadian flax.

Some Canadian linseed will still enter that market because of the superior quality of the product.

But he believes sales to China will be 50,000 to 60,000 tons this year.

Chuck Penner, an analyst with LeftField Commodity Research, made a similar statement at the annual general meeting of the Saskatchewan Linseed Development Commission.

“As much as it pains me to say it, Canada is no longer the market leader in linseed,” he said.

Penner said Canadian producers produced about 473,000 tons in 2022.

Allaire got slightly different figures from a Chinese buyer who told him that Kazakhstan produced 600,000 tons that year and Russia produced another 1.5 million tons.

The buyer expects a drop in production this year, forecasting 500,000 tons from Kazakhstan and 1.2 million tons from Russia.

But that will still be enough for the Black Sea region to continue to dominate the Chinese and European Union markets.

Tags: Black Sea region, linseed, China, EU, Canada