Oats flat for now, but future gains likely

(Resource News International) — Tighter supplies should eventually send oats prices in Western Canada higher, but the market is seen trading in a narrow range over the next few months, as post-harvest supplies should temper the upside for the time being.

Bryan Cross, a grain buyer with Edmonton-area processing firm Alberta Oats Milling, described the oats market as flat right now, and he expected it could stay that way at least until the new year.

The latest Prairie Ag Hotwire data shows oats bids topping out at $2.50 per bushel in Alberta, $1.98 in Saskatchewan, and $2.12 in Manitoba.

Canada’s oats crop is currently estimated at 2.9 million tonnes, which compares with 4.27 million in 2008-09. Harvest delays, particularly in Saskatchewan, could cut into that production number even further and eventually support prices.

However, Cross thought the harvest delays would actually weigh on prices in the short term.

The oats coming off at this late stage are in tough, damp shape, he noted, and the majority of producers will be looking to dump them into the market rather than store it themselves.

“The good, dry stuff in the bins will take some money to get out,” said Cross, adding that “once it’s in the bin, it’s always harder to buy.”

Oats that are not harvested before the snow sets in could be combined next spring, as the crop does overwinter reasonably well, said Cross.

However, he added, rodent infestation would likely be an issue and any crop at that time would need to be cleaned before buyers would look at it.

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