CNS Canada — Farmers with oats to sell and end-users willing to buy them are far apart in terms of price right now, limiting how much business is actually taking place.
Major U.S. customers are well covered for the time being, “with enough to last for a few months worth of milling,” said Ryan McKnight of Linear Grain at Carman, Man.
Higher pricing was available from time to time from Canadian millers, he said, but buyers and sellers were generally very far apart on price.
McKnight’s company is currently at a zero basis relative to U.S. futures, which would normally be considered strong at face value.
However, with futures trading below US$2 per bushel, the zero basis only works out to about C$2.60 per bushel when the exchange rates are factored in. Manitoba farmers wanted at least $3 per bushel, McKnight said.
Quality issues with northern Saskatchewan’s crop were another issue in the oats market, keeping some supplies out of the regular channels, he said.
Looking ahead, McKnight said many Manitoba farmers had already contracted some oats area at about $3.25 per bushel for new crop.
However, with the current softness in the market, he expected actual seedings would be down on the year as many producers look to other options, including wheat and pulses.
“I cannot find anybody willing to pay what my customers want right now,” said McKnight. “We need somebody to start buying up some oat futures, to get the price back to levels we can do some business at.”
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.