Ample supply keeps oats under pressure

Winnipeg (CNS Canada) —Canadian oat crops are in reasonably good shape following recent rains, although prices may find themselves under pressure as end-users are well covered for the time being.

Farmers planned on seeding about 3.15 million acres of oats in the country in 2018, down only slightly from the 3.20 million seeded the previous year, according to Statistics Canada data.

Ryan McKnight, of Linear Grain in Carman, Man., said the 2017 crop was very good quality, and ending stocks are expected to come in at about one million tonnes both in 2017 and again in 2018. The good quality last year meant that end users are getting a better milling yield, and need fewer oats as a result, he added.

“There are a lot of oats, and buyers are patient,” said McKnight. He expected prices would trend down over the summer, unless some bad weather hits the key growing regions.

“We’re into that time of year where it’s a weather market,” said Scott Shiels, of Grain Millers Canada in Yorkton, Sask. He said oats crops were seeing even emergence and were looking good at this early stage, with recent rainfall helping moisture conditions improve in most areas. However, there was probably too much rain in some cases. Weed issues were also starting to become a problem following the rains.

Shiels said his company had pulled old crop bids two weeks ago, and were well covered for the new crop although there was still some contracting going on. He had a new crop bid of around C$3.00 per bushel, but noted that line company bids were generally lower as they were still uncertain over their new crop programs.

In addition to the large supplies weighing on prices, McKnight said the end-use specifications for oats were becoming more specialized, which sends different price signals. As an example, some millers may want gluten-free certification, while others are looking for glyphosate-free oats. “It’s becoming a ‘foodie’ product,” said McKnight.

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