Prairie oat cash market strong with tight supply concerns

Cash prices for new- and old-crop oats in Western Canada are strong, underpinned by expectations that carryover stocks will be tight in 2012-13 and 2013-14.

According to Prairie Ag Hotwire, values on Thursday for old crop delivered to the elevator in Western Canada were as high as $4.05 per bushel, while new-crop values ranged from $3.20 to $3.70/bu.

The tight supply expectations should continue to underpin the market in Western Canada, said Ryan McKnight, grain merchant with Linear Grain at Carman, Man.

“In my opinion, the price spread relationship between oats and other commodities will continue to strengthen,” he said.

The latest supply and demand report from Agriculture and Agri-Food Canada, released May 21, pegs 2013-14 carryout stocks at 400,000 tonnes for oats, up slightly from the 250,000 tonnes expected in 2012-13. In 2011-12, carryout stocks totaled 795,000 tonnes.

Carryout stocks should be up slightly in 2013-14 from the previous year because more farmers intended on planting more acres in the spring of 2013. But some of those acres will likely be lost because of the delayed spring in Western Canada.

According to Statistics Canada, as of March 31, farmers in Western Canada intended to seed 3.38 million acres of oats in 2013-14, up from the 2.85 million planted in 2012.

Shawna Mathieson, executive director of the Prairie Oat Growers Association at Regina, said most of the intended acres should get planted — but some may not.

For example, in Saskatchewan, about seven per cent of the crop is expected to go unseeded, Mathieson noted.

Some acres could also go unseeded in Manitoba because oat producers in the province like to get the crop in as early as possible to avoid issues with quality and yield, McKnight said.

“If people are seeding oats too late and it’s a hot summer, then they come off with a very, very difficult-to-market quality,” he said.

“They will go in”

In Alberta, unplanted acres probably won’t be a problem, according to Harry Brook, a crop specialist with Alberta Agriculture and Rural Development at Stettler.

“Oats are a part of those last crops to be seeded” in Alberta, he said. “There’s still a fair bit of oats to go in the ground, but they will go in.”

Though there are some concerns about acreage going unplanted, the crops that are in the ground seem to be doing well so far.

“Most people were running about a week late planting, but crops came up faster than usual because it was warmer since it was a little later,” said Mathieson. “So, crops were up almost about the same time and I don’t think there will be any major yield concerns at this point.”

But that will all depend on what happens with the weather over the summer, Mathieson said, adding there could be too much rain, not enough rain, or hail — any of which would be harmful for yields.

— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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