Although oat values on the Chicago Board of Trade (CBOT) have been trending upward — albeit slightly — over the past couple of weeks, one analyst said producers on Canada’s Prairies should be thinking about selling some of their product before values decline.
Ryan McKnight, a grain merchant with Linear Grain at Carman, Man., said prices tend to follow what’s happening on the CBOT, and although prices have moved higher, that doesn’t mean they will last.
“Speculative activity tends to happen in big chunks, and that can often move the market up or down quite significantly and quickly,” he said.
There has not been a lot of selling from Prairie farmers, he said.
“There were better opportunities earlier in the year, but guys had these numbers in their head that they wanted, but the price just never got there,” he said.
Another factor expected to weigh on values, according to McKnight, is a lack of demand from the horse sector.
“We aren’t seeing much in the way of demand from the horse market. I keep hearing that in the southern U.S. they are using corn gluten pellets and soy hulls,” he said. “They are about as healthy for the animals as oats are, and they are quite a bit cheaper.
“Hopefully we will get some more feed demand, because historically we have shipped a fairly large percentage of our product in the horse market.”
Asked if the low stock total would end up having a bullish influence on prices, McKnight said that wouldn’t be the case, because the market was expecting a low stocks total.
Current elevator deliveries for oats are bringing as much as $3.12 per bushel in Manitoba, $2.83 per bushel in Saskatchewan, and $3.01 per bushel in Alberta, according to Prairie Ag Hotwire.