Glacier FarmMedia | MarketsFarm – United States oats futures and Western Canadian cash bids for the cereal crop are seeing very different levels of activity in the first half of September.
The December oats contract at the Chicago Board of Trade (CBOT) closed at US$3.68 per bushel on Sept. 11, a rise of 58.25 U.S. cents since Aug. 22 and the highest prices seen since June.
However, delivered oats bids in Western Canada ranged from C$3.25 to C$3.75/bu. on Sept. 11, according to Prairie Ag Hotwire. In Manitoba, the maximum price rose 10 cents from the previous week, while those for the other two provinces remained steady.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
As the Prairie oat harvest gets going, Scott Shiels, grain procurement manager at Grain Millers Inc. in Yorkton, Sask. is seeing yields in good shape despite quality issues.
“Harvest has been going hard here (since the start of September),” Shiels said. “There’s pretty good quality, but there are definitely some concerns with some light oats in some of the earlier harvested stuff … but yields have been really good. Lots of volume, so hopefully it will make up for a lack of quality in places.”
Ryan McKnight, general manager of Linear Grain Inc. in Carman, Man. said he has heard of oat crops varying in yield from 80 to 180 bushels per acre, with some showing signs of mildew.
“We’re seeing not a lot of oats at the minimum 2CW grade,” he said, adding his company buys on milling specs. “Test weights we’re seeing are light. So that’s been a little bit of a struggle.”
Oat stocks as of July 31, according to Statistics Canada, fell from 1.275 million tonnes in 2023 to 463,000 in 2024. Shiels said they have been “out of balance” since the 2021 drought and he predicts smaller numbers in 2025.
“Stocks at under 500,000 tonnes are concerning and we will have less than that going into next year. More like 250,000 or 300,000 (tonnes), which, in our side of the industry, we would call ‘zero,’” he said. “We’re trying to find that normalcy again in acreage and some normalcy in prices as well. We don’t want prices to go down to C$3 or C$3.50 per bushel.”
McKnight said demand was down last year with reduced exports to the United States and fewer oat product exports out of Canada amid lower stocks.
“We did find buyers were very patient. People weren’t chasing them as hard last crop year compared to other years. But I think that was a function of demand,” he said, adding that some of Linear Grain’s customers are buying cheaper U.S. oats rather than those from Canada.
However, Shiels thinks demand for Western Canadian oats is going strong.
“Globally, we’ve pretty much become one of the most trusted and consistent suppliers of oat products. The Canadian brand is very strong, as well as the domestic brand in North America. Oats are a good healthy staple. So demand is continuing to grow,” he added. “I do anticipate strong, aggressive pricing for next year’s crop. New crop pricing will be chasing after acres.”
Oats bids of C$5/bu. could be a possibility next spring, according to Shiels. McKnight said the same thing could happen depending on the prices of other crops.
“This year, if oats are priced relatively well to wheat and barley, I think the acres will naturally be higher for the next crop season. We should see more acres going into oats because oat futures are trading at 59 per cent of wheat futures,” McKnight said. “Usually, when they’re trading at 50 per cent or more, you tend to get more oat acres.”
Statistics Canada reported in its principal field crop production report on Aug. 28 that a 14.7 per cent year-by-year rise in harvested area at 2.339 million acres is set to result in a corresponding 10.1 per cent gain in production at 2.911 million tonnes. Updated production estimates will be released Sept. 16.
