Oats have been left out of the recent rally that saw most crop prices rise.
That isn’t likely to change much, say market analysts. There’s a reason oat prices are stumbling along close to their low point of early December while the prices of other crops have risen.
“Fundamentally the commercial oat market is flush with oats, with 2009 oat ending stocks currently heading for a record high of 1.15 million tonnes,” said OatInsight analyst Randy Strychar in a Jan. 11 commentary.
“Longer term, unless corn rallies … oat prices will remain range bound. Look for oat futures to trade in a broad range of $2 to $2.50 US per bushel basis the March contract.”
Read Also
China’s grain imports have slumped big-time
China purchased just over 20 million tonnes of wheat, corn, barley and sorghum last year, that is well below the 60 million tonnes purchased in 2021-22.
Prairie oat growers produced a huge crop last summer, most of it unpriced because farmers didn’t realize they would have so much to move after harvest.
That’s left bins bulging and farmers and buyers locked in a standoff, as farmers refuse to sell at prices they deem too low and buyers refuse to fight for supplies that they already have in abundance.
Old-crop prairie cash prices are $2.40 to $2.65 a bu. in Manitoba, $2.15 to $2.36 in Saskatchewan and $2.06 to $2.17 in Alberta.
Strychar is recommending farmers have about half their 2008-09 crop sold now. In coming weeks, farmers should make sales for further-out months because there are big premiums compared to nearby months. The spread between January and March oats at the Can-Oat mill in Portage la Prairie is 14 cents per bu., which rises to 23 cents for August delivery.
“The market is telling growers to store and sell oats forward,” said Strychar.
Farmers should also consider contracting some of their 2009-10 production, Strychar said.
Anything above $3 per bu. for southern Manitoba delivery is a good deal in the present market. Generally, new-crop prices are $2.71 to $2.76 in Manitoba, $2.42 to $2.70 in Saskatchewan and $2.26 to $2.29 in Alberta.
