Oats bids high, but waiting on clearer direction

Oats bids can be found at rather high levels across Western Canada, but the uncertainty of new-crop production is limiting actual activity in the market for the time being.

“Right now not a lot of guys are pricing, as they are a little nervous about the weather and what kind of crop they will get,” said Jarrod Firlotte, general manager of Emerson Milling at Emerson, Man., about 100 km south of Winnipeg.

While prices are high, the market is relatively slow, but could pick up as the crop advances and farmers get a better handle on the supplies they will be dealing with, he said.

The Canadian Wheat Board recently estimated six million to eight million acres of western Canadian farmland will be left unseeded this year due to flooding and excess moisture. In areas where producers are still trying to get a crop in the ground, the main choices for late seeding are oats, barley and canola.

While late switching to oats could limit the unseeded oats acres, Firlotte noted that when it comes down to it, “more often than not, it will be canola.”

The generally late seeding this year creates some uncertainty around yields and quality, which could keep oats values supported going forward, said Firlotte.

However, he added, the price direction will largely depend on what happens in the U.S. corn market as oats are usually a follower, rather than a price leader.

Old-crop oats bids as high as $3.50 per bushel can currently be found in Manitoba, with prices topping out at $3.67 in parts of Saskatchewan, according to the latest Prairie Ag Hotwire data.

For new-crop, bids were topping out at $3.60 per bushel in both provinces, although Firlotte said his company had recently put out offers as high as $4 per bushel for December delivery.

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