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Large oat production won’t move prices

MarketsFarm — While the most recent crop production report from Statistics Canada predicted significantly more oats than originally expected, prices will likely remain stable.

Statistics Canada estimated 3.952 million tonnes of oats will be grown in 2019, up considerably from the 3.436 million tonnes produced in 2018. But low carryover stocks from previous years means this report has neither a bullish nor bearish effect for oat prices.

“The bins are empty, the pipelines are empty, we saw the lowest ending stocks on record,” explained Scott Shiels, a grain procurement manager with Grain Millers Canada at Yorkton, Sask.

“Even with the 15 per cent increase in production, which is based off of the 20 per cent increase in acres, we needed all of this and more.”

While cash prices for new-crop oats are likely to stay around the $2.75-$2.80 per bushel range, futures prices may move lower. However, the oats market is largely cash-driven.

“We’re going to see buyers paying what they have to pay,” he said.

“Prices where they are today are pretty reasonable in that respect.”

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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