(Resource News International) — A sharp rise in CBOT oats futures prices over the past week has done little to sway the cash market in Western Canada, which remains steady, according to an oats buyer. He expected current-crop oats bids would fluctuate within a range, with better prices possible for 2010-11 oats.
The CBOT (Chicago Board of Trade) March oats contract increased by nearly 20 cents per bushel over the past week, closing as high as US$2.79 per bushel on Jan. 4. Prices were starting to edge lower on Jan. 5.
“I don’t think there’s any real rhyme or reason behind (the strength in the futures). It’s just people playing the markets,” said Bryan Cross, a grain buyer with Alberta Oats Milling Ltd. near Edmonton.
Cross expected the futures market would remain flat overall, with speculative positioning and movements in the U.S. dollar causing some minor fluctuations in prices.
“We’re not in a long crop and we’re not in a short crop,” Cross said, adding that “I think there will be enough to go around.”
Looking at Western Canada, the latest Prairie Ag Hotwire data shows oats bids, delivered to the elevator, topping out at $2.54 per bushel in Alberta, $2.20 in Saskatchewan and $2.47 in Manitoba.
Cross said bids at his plant have ranged from $2.40 to $2.50 per bushel for the past three months and were not likely to see much movement.
Producers hoping to hold out for better prices may be able to see 10 cents per bushel more closer to the spring, he said.
However, he added that they would likely be better off selling now, as “you don’t get any interest in the bin.”
As far as new-crop pricing is concerned, Cross said current new-crop futures prices would work out to cash bids around $2.75 per bushel, “so there is some upswing.”
Some companies may be looking to buy acres in the spring, he added, which could lead to some pricing opportunities.
Market analysts have pegged the $3 per bushel level as a potential new-crop pricing target.