(Resource News International) — Western Canadian oats prices should see some strength going forward, especially on new-crop bids, as supplies continue to tighten.
Oats merchant Ryan McKnight of Linear Grain at Carman, Man., said activity in the oats market was slow currently, which is typical for this time of year as farmers slow down their deliveries.
However, from a pricing standpoint, he said basis levels were strengthening and bids were improving, with spot prices in southern Manitoba currently around $2.45 per bushel.
“We’re expecting cash values to stay strong, and get stronger through the winter months,” said McKnight. He didn’t think prices would get as high as they were in 2008, but should near the $3 level going forward.
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U.S. elevators were still holding large oats stocks, but those supplies will eventually be worked through, he said.
Given the tightening of supplies, new-crop bids should come in at $3 per bushel or better before the spring in order to make sure the needed acres are planted, according to McKnight.
The poorer quality of this year’s crop was also a factor in the Manitoba oats market, with fewer supplies available for human consumption.
McKnight said there were more lower-quality oats than normal this year, due to higher moisture content. As a result, he recommended producers get their oats dried down if they want to market them.
“There are no end-users that I know of that have the ability to dry oats,” he said.
McKnight expected the lower-quality supplies would eventually find a home, although it may take a while as they are slowly blended off.
