(Resource News International) — Cash bids in Western Canada for oats have been steadily trending downward as continued large supplies and the steady decline in CBOT oat futures depress values.
“The drop in CBOT (Chicago Board of Trade) oat futures has definitely hurt the cash market in Canada,” said Bryan Cross, an oat grain buyer for Alberta Oats Milling in Edmonton.
He acknowledged there was still a lot of oats from the previous year’s harvest were being worked through as well as a lot of leftovers from this year’s harvest.
The fact end-users also remain well stocked with oats also has prevented any major upward push in bids.
Cross said the decline in value could prevent producers in Western Canada from seeding the crop to a certain degree.
“There had at one point been the perception that oats acres in Western Canada would be up significantly as the crop was one of the few that pencilled out as a profit,” Cross said.
“However, with the steady decline in values, producers have become discouraged with the price being offered, and are likely to cut back on some of that area.”
There could be some temporary upward pushes on old-crop oat bids as end-users in some parts of the country try to cover some immediate and unexpected demand, he said.
As for new-crop bids, there was always the possibility that production somewhere could be impacted by adverse weather, which could see values jump from current levels.
Old-crop bids for oats, delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, currently range from $1.50 to $1.84 a bushel, in Manitoba from $1.96 to $2.18 and in Alberta from $2.10 to $3.27.
New-crop bids for oats, delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, currently range from $1.75 to $2.05 a bushel, in Manitoba around $2.15 and in Alberta from $1.97 to $2.10.
Old-crop bids for oats as of March 1 in Saskatchewan were $1.69 to $1.73 a bushel, in Manitoba $1.99 to $2.29 and in Alberta $1.50 to $2.70.
New-crop bids for oats on March 1 in Saskatchewan were $1.92 a bushel, in Manitoba $2.40 and in Alberta $1.95.