(Resource News International) –– Even though harvest conditions aren’t what oat producers have been asking for, prices should be strong for the supplies that do eventually come off the field in Western Canada.
Oat prices have been going up over the last while across the Prairies. Terry Tyson, commodity procurement manager at Grain Millers Canada at Yorkton, Sask., said a lack of product is assisting the surge in the price.
“We had a lack of acres back in the spring, and weather issues are a big factor now as we head into harvest,” Tyson said. “The outlook for the incoming crop is for much tighter supply.”
The upswing in oats at the moment has come as a bit of a surprise to Tyson, as he expected to see the bullish behaviour a few months down the road.
“I’m surprised to see them going up now. The market is quite well supplied short term,” he said. “I expected upside in the oat market towards December or January.”
Fund buying has been a primary reason for the gains in oats at the moment, Tyson said. He was not sure, however, if the fund buying would continue.
Harvest of oats has just barely begun, and Tyson said from what he has seen, the crops have looked good.
“We’ve seen just a few samples, and they’ve been fine. Test weights have been decent, the thin counts, colour, it’s all been fine, but it’s really from just a handful of samples,” he said. “It’s really too soon to say that (the sample) is a good representation of the whole crop.”
As far as demand is concerned, Tyson said it hasn’t been great, but is slowly picking up.
“The oat milling industry in general has been slow,” he said. “This is the time of year when it would normally pick up, and I think it is slowly starting to do so.”
With this mind, Tyson said, he expects to see more upside to the oat market.
Elevator deliveries for oats were bringing as much as $3 a bushel in Manitoba, $2.74 per bushel in Saskatchewan and $2.70 per bushel in Alberta, according to Prairie Ag Hotwire. Those values are all well above where prices were at the same point a year ago.