Flax Futures died yesterday - Long Live Flax

[Incognito]

Without a whimper, the last 5 contracts of flax were taken out.

No fanfare. No pomp like there will be on Friday (nor wake afterwards).

I't won't make it on the new electronic board. Yes it will be listed, but it won't make it.

The price discovery mechanism is gone.

Before the 51% today or the 49% tomorrow all take a look at the New World Order and think that everyone from your local establishment is your friend - remember this - they killed it.

Why? Because they don't want farmers to know what the price of Flax is/was/will be.

And it is for this reason, that I do not hold much hope that the canola contract will fare much better.

Electronic trade starts Monday. Already we are seeing canola basis fluctuate to attract seed as if the futures were not/will not work/working.

Rye died. Oats died. Peas died 4 times. Flax had the plug pulled yesterday.

The CFTC has teeth (and uses them). The Manitoba Securities Commission is a puppet.

Given the past history and the manner in which grain companies have made the decision NOT to participate in price discovery, do you really think they would look after your interests in the FREE WORLD?

Answer me that one question and then maybe I too can jump on the FREE WHEAT IN THE WEST wagon.

Want further proof, how many farmers will be on the board at SWP in the new order.

The only ones looking after farmers are farmers and frankly, you all suck at it.

The closest organization you have watching your back is the CWB. Can they improve. 100%. If they would stay out of the frikkin politics and work on change, they might be far enough ahead that they would have won the race.

Heed this: Change is coming fast. And you,the CWB nor I are ready for it.

[boone]

INCOGNITO: that atta take some slack out of those 'red necks' jaws that thinks that this coulda been a better world if we could rid of those orderly market-tin pinko commies that done climbed up outta that saskatchaun river sludge an floated inta PEG Town.
And you better take half a Prozac and post us in the morning.lol

[Incognito]

Doncha just hate ADHD.

[melvill]

Incognito, where did you get the info that WCE flax had "died"? Or were you just looking at the open interest numbers?

I looked all over the WCE web site for an announcement on flax but I couldn't find one and I didn't get anything from them by e-mail.

[Vader]

I heard that Cargill (60B$), ConAgra (30B$), Bunge and Louis Dreyfus (20B$ each) control 73% of world trade in grain. The AWB website shows in their annual report that Glencore did about 45B$ in the grain trade last year and I have never even heard of them. If my math is correct Glencore has about 22% of world grain trade.

Where does that leave me?

I do not see myself as a fear monger. I try to be realistic about the future. If the current trends continue the multinational grain companies will emerge as the "farmers" of the world. They already control the industry. There may be further consolidation. These grain companies have no interest in land ownership. Land ownership is not necessary to take ownership of the grain production. Land owners will contract with the grain companies to produce the vast majority of the grain and with a slight change in the wording of the contract rather than growing their own grain they will be growing grain which belongs to the grain companies.

With some luck producers might find themselves in a position where they are actually paid a wage for the work they do, unlike the situation we have today. Efficiency may suffer but that will not matter as any loss of efficiency or productivity will be passed on to the consumer because these "grain" companies actually make the vast majority of their profits from food processing.

Do you agree with my vision of the future? Should we resist? Are we crazy to think that we can resist?

Do we have an objective? Is it survival? Is it independance? Is it quality of life and if so how is that best accomplished? Is farming a lifestyle? Is it a right?

Do farmers have a role to play in environmentalism and are they the best equipped to serve that function? Could the multinationals be placed in that role and be held accountable? Would they in fact do a better job? they are much better financed. They can hire professionals. I can't.

Nuff said!

[charliep]

Not delisted but zero open interest.

[charliep]

Vader

If you are right (I don't necessarily 100 % agree), what does the agricultural industry do differently? I assume one way would be to look at ways of adding value/getting closer to your customer. Moving from a commodity mentality to a value based product.

[charliep]

Can we use flaxseed as an example.

Farmers grow on the prairies. A European crusher needs product. How does the industry improve the signals between these two groups and at the same time keep the price spread between seller and buyer as low as possible.

Is this a commodity that should be processed more in Canada and sold as linoil versus selling seed? By who?

I apologize for being the mechanic but I like to break things like this down into processes and look at things that can be fixed.

[Incognito]

1) You assume that someone wants to send some "price signals" Charlie. In the same week that linseed oil hit 30-year highs in Europe, the non-functioning flax futures contract was pounded down $30.00 in one day. Some companies use it to price at local elevators.

2) this from a grain company marketing newsletter from the same week - October 15 (careful not to gag):
. Over the past week we have seen elevator prices depreciate C$40/Mt or over C$1//bu.
• Growers have without a doubt been surprised by such a drastic change; for the most part they are unaware of the fundamentals that could lead towards such rapid price movement.
• The key is movement, as the flax harvest has finally progressed, everyone has realized that there is a crop to trade and $10.50/bu is too high to sustain export markets into Europe.
• European crushing facilities have had their hands tied over the past couple of months as overseas indications have provided them without the ability to make profitable linoil sales.
• As flax began to move in the grain system, commercials found out that current market levels would not result in any type of business.
• Trading ground has been around US$400/Mt CIF Ghent and lower; it is anticipated that the market will decrease until the completion of harvest.
• Yield results range anywhere from 2 bu/acre to more than 30 bu/acre.
• Judging from current movement, there is a potential for a 700,000 Mt flax crop in Canada

3) today flax bids in Europe are $500.00 for the open

4) Flax is one commodity that Canada can affect world prices whether u process it to oil or grow it.

[Vader]

Processing is good - if you have a market. You don't want to even think about it otherwise.

Building a pasta plant today would be a disaster. Pasta has become a commodity. Not much value added there. High capital cost to build a plant. Declining consumption. Overcapacity.

Flax is a different animal. As is mustard and some other grains where Canada has a huge influence on world production.

But before we can answer the question "What does agriculture do differently"? I suggest that some of the more basic philosophical questions need to be answered. You can bet that the political powers are looking at that aspect as opposed to agricultural profitability. They simply don't care about the sustainability of our farms for the purpose of sustaining farms.

[Incognito]

Now that my right wing friends have come to the conclusion that I must be on/have crack/cracked:

Your statement: "They simply don't care about the sustainability of our farms for the purpose of sustaining farms."

Thats cause in Europe they starved and have never forgot it.

[Vader]

I doubt that we will ever get to the point of starvation in our lifetimes............but having said that we will chew through nearly 615 million tonnes of wheat this year along with the record production of corn and soybeans.

It would not take much of a production problem to destabilize the world's food supply.

[Incognito]

U know, in the 80's the Hon. O.E. Lang told me that the world population is such that it will become "ravenous" and we were one production problem away from $6.00 wheat.

I, like many others, have been waiting patiently for that day.

[charliep]

Just a note there is a limit to how far you can push commodity prices for crops Canada plays a dominant role.

We have seen 60 cent/pound plus yellow mustard prices in a shortage year. This year saw a shift in demand to other types of meat binder and condiments or at least ways of stetching the limited supplies that were available.

The shifts are away from oils based paints and new substitutes for linoil.

Years of high durum prices have seen/would see shifts to non traditional growing regions. Lower end pasta products (i.e macaroni) can use regular wheat.

If there isn't a demand for the processed product, there likely isn't a need for the commodity that goes into it.

[Incognito]

Grasshopper:

Flax is loaded with more omega-3 than any other plant on the planet.

120 Flax capsules is worth 2X the price of a gallon of paint.

All the flax that is leaving western Canada in containers is not being converted into paint and linseed oil. The demand has not shrunk, it has shifted.

The parable of the three monkeys:

If it doesnt leave Thunder Bay or Vancouver and the CGC didnt see it, it must be still on the farm.

Mustard:

For the past 3 years, the main mustard seller(prepared mustard) in Canada (En français) has not raised prices. At what point does the 72 cent yellow mustard from 2002 impact their selling price, if ever?