Oats bids lag futures, could go lower

(Resource News International) — Cash oats bids in Western Canada have shown some strength over the past month, but have lagged Chicago Board of Trade (CBOT) oats futures considerably.

With the futures dropping in recent days, cash values could also be due to turn lower, although to a lesser extent, observers suggest.

Mike Jubinville of Pro Farmer Canada said the recent run-up in the futures was all a function of speculative fund buying and had little to do with the actual supply/demand fundamentals of the Canadian oats market.

End users were having no trouble finding supplies due to large old-crop stocks, Jubinville said.

As a result, he said, he thought any producers still holding old-crop oats should make some sales now, before the artificially higher prices get knocked back down.

Looking at the new crop, Jubinville said he thought conditions were reasonably good in the oats-growing regions of Western Canada, although the crops are maturing later than normal.

Real Tetrault, president of Emerson Milling at Emerson, Man., said the lateness of spring seeding this year, particularly in Manitoba, could lead to more acres going into oats.

While acres may be up in Manitoba, Tetrault said he thought the dryness problems in Saskatchewan could be enough to support prices. In addition, the later-seeded acres will be more vulnerable to frost damage at harvest time, he said.

Spot bids for oats delivered to the elevator currently range from $1.90 to $2.99 per bushel in Manitoba and $1.74 to $2.30 per bushel in Saskatchewan, according to the latest Prairie Ag Hotwire data.

New-crop bids top out at $2.25 in Manitoba and $2.34 in Saskatchewan.

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