CNS Canada — Prairie oat prices are ticking upward as buyers try to coax farmers into a slow market — but prices, most notably in Saskatchewan, may need to move further before that happens.
“Prices are below expectations, and in some instances quality is below what the market is willing to accept at this point,” said Ryan McKnight, merchandising manager for Linear Grain at Carman, Man.
Most quality issues stem from northern Saskatchewan, where producers are seeing sprouting and groat damage, which in some cases has resulted in rejected rail cars, he said.
“The industry needs to sort out what they can and can’t use,” he said. “Some buyers have tolerances for certain amounts of that, and others don’t.”
Manitoba has seen an uptick in local farmer selling as the province has moved past psychological pricing triggers — “but not a whole lot of out of Saskatchewan at this point,” McKnight said. “Oat marketing has been a little slower than we would like.”
Delivered elevator oat prices fall between $2.37 and $2.67 in Saskatchewan, $2.87 and $3.10 in Manitoba, and $2.70 and $3.16 in Alberta, according to Prairie Ag Hotwire.
“We’re a little way away from what producers would like at this point,” McKnight said.
Slower than expected movement out of Western Canada has also been reflected in stronger Minneapolis basis prices, said Randy Strychar, a Vancouver-based oat market analyst at Ag Commodity Research.
The March Minneapolis basis level for oats is between 10 to 55 cents above the futures, according to a USDA report.
“It’s resulting in higher prices across Western Canada, because as you move the basis levels up higher it pushes the flat prices up higher,” Strychar said.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.