Canada has a huge glut of oats and farmers need to reduce acres, according to one market analyst.
“Oats will be the single poorest crop this year, even if there is a weather problem,” said Don Bousquet, who gave an outlook for the crop at the recent GrainWorld conference in Winnipeg.
In 1998, farmers produced close to four million tonnes of oats, said Bousquet. At the end of this crop year, he believes they’ll still be holding 1.3 million tonnes.
That’s almost as many oats as Canada exported this year, said Bousquet.
This summer, he expects farmers will grow 3.6 million tonnes of oats, leaving a stocks to use ratio of close to 27 percent for the year.
Bousquet said he thinks old-crop oat futures prices will rally into spring to $1.10 to $1.20 (U.S.) on the Chicago Board of Trade, while new-crop oat futures will rally to $1.20 to $1.40.
After harvest, futures prices will drop to $1 to $1.10.
“If the prices of the Canadian dollar goes up, all it does it take money out of your pockets.”
