CNS Canada –– The oats market in Western Canada has gone cold, with little heat expected until closer to spring seeding.
“The basis is the thermometer, and right now oats are getting cold,” said Ryan McKnight of Linear Grain at Carman, Man., noting basis levels were generally fading.
“We’re just not seeing much demand for oats anywhere at the moment, for nearby or deferred periods,” he said, adding “buyers don’t chase grain when they’re sitting full of inventory.”
North Dakota also had a better-quality crop this year, which meant some historic markets were not as active looking for Canadian supplies as there were cheaper oats closer to home, he said.
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Oats bids are now at about $3.25 per bushel in Manitoba and $2.75 in Saskatchewan, said McKnight. While farmers would like to see prices at least 25 cents higher, he said there was obviously still enough grain moving at current levels to keep the end-use market satisfied.
“I have to bid based on what I can resell it at,” he said.
While oats look sluggish, with both buyers and sellers waiting to see who blinks first, seeding conditions could be one catalyst pushing values one way or the other.
McKnight said most industry participants still anticipate oat area to grow in 2015, as the crop compares favourably with other options.
Oats are cheap to grow and perform well, said Mike Jubinville of ProFarmer Canada. The economics say oats acres should be down, he said, but the agronomics will see growers keep them in the rotations, with area likely in the three million-acre range.
Agriculture and Agri-Food Canada now forecasts oats seedings at 3.09 million acres, which would be up slightly from the 2.8 million seeded the previous year. Statistics Canada releases its first survey-based acreage estimates on April 23.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
