Oat prices edging down, well off highs

CNS Canada — Canadian oat prices have dropped slightly after a brief incline last week, as the market took same direction from U.S. futures.

“It has something to do with the index fund roll, so that was weakening the spread,” said Ryan McKnight, a grain merchant at Linear Grain at Carman, Man. “So I think that’s what we were seeing yesterday.”

The nearby CBOT July oats contract has shown some independent strength recently, but lost 12 cents on Tuesday to settle at US$3.59 per bushel.

McKnight said they’ve been bidding higher for oats in the last week, but that has fallen off at the beginning of the week with futures being down.

“We’ve been bidding for some nearby stuff in the last week, for about $3.50/bu. delivered into Carman,” said McKnight. “But that’s kind of fallen off today with the futures being down.”

Northern Saskatchewan is bidding around $2.50 to $2.60/bu. and southern Saskatchewan is bidding between $3.10 and $3.20/bu., he said.

While these prices may be up recently, they still don’t compare with oat prices in the previous summer.

Prices were “quite a bit higher actually, specifically in Saskatchewan,” said McKnight. “I think we were paying around $3.50 to $3.75 (per bushel) in Saskatchewan and over $4 (per bushel) in Manitoba.”

A potential factor contributing to these prices could be that larger grain companies may be straying away from certain crops such as oats, he said.

“Possibly some of these grain companies just want to do wheat and canola. I don’t know this for a fact, but it’s possible they could be focusing on bigger stuff and letting some of the other things slide,” said McKnight.

“I think the big problem is just that it’s tough to trade a market when you don’t know when you’re going to get your logistics. It’s tough to trade that, whereas I think grain companies are pretty confident now that they’re going to be able to get cars into their port positions.”

Some oats do get shipped to Thunder Bay, he added, but grain companies most likely have a stronger interest in moving more profitable crops.

“You can get 90 to 100 tonnes of wheat on a railcar and you can only get 70 to 75 tonnes of oats on a railcar,” he said.

— Marney Blunt writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

 

 

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