(Resource News International) — The oats market in Western Canada remains relatively stagnant, with little sign that prices will show any significant improvement any time soon.
Oats futures in Chicago dropped sharply in early January and have been hard-pressed to see much recovery over the past month.
Cash bids in Western Canada are in a similar pattern, with many market participants on the sidelines for the time being, awaiting some fresh market moving news.
“The market crashed here about a month ago and it’s trying to recover, but it’s not happening very quickly,” said an Alberta-based oats merchant.
Terry Tyson of Grain Millers Inc. at Yorkton, Sask. said oats futures could expect to see a move higher from a seasonal perspective.
However, he said, any actual strength in the futures will depend on what happens in corn, which is looking generally bearish right now.
Looking beyond the futures, Tyson said steady farmer deliveries were limiting the need to tighten basis levels in the country.
While prices are down on the month, he said, the fact that much of the oats were harvested in tough/damp condition meant that farmers were still looking to move them before the temperatures warmup in the spring, increasing the risk of spoilage.
Most custom grain dryers were handling canola in the months immediately following the harvest, and were now seeing more oats move through, Tyson said. After drying their oats, producers were usually selling them into the market.
There still may be some need to encourage acres this spring, he said, but not to the same extent as before the January collapse in prices.
Looking at Western Canada, the latest Prairie Ag Hotwire data shows oats bids, delivered to the elevator, topping out at $2.59 per bushel in Alberta, $1.85 in Saskatchewan and $2.29 in Manitoba. New-crop bids across the Prairies can be found ranging from around $1.95 per bushel to $2.40.