(Resource News International) — Expectations for fewer oats acres in the U.S. won’t impact the Canadian oats market in any shape or form, according to industry
participants.
The U.S. Department of Agriculture, in its prospective plantings report released March
31, estimated U.S. oats area in 2008 at 3.420 million acres, down nine per cent from 4.168 million the previous year.
“Essentially, all the oats produced in the U.S. is for
domestic consumption, mostly likely as a feed on the farm,” said Real
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End-users in the U.S. know this, and in turn generally
have covered most of their requirements from Canada as a result, he said.
“In terms of U.S. area influencing Canadian oat acres or
prices, there is none,” Tetrault said. In
some instances, he said, U.S. oats will fill in for Canadian oats during the
month of July, especially during years where supplies are the
tightest.
However, he said, more important to watch will be the
Minneapolis spring wheat value, and to some extent Chicago Board of Trade (CBOT) corn
futures.
“If the Minneapolis values continue to climb, there is a
good chance that producers in Western Canada will look to plant
However, on the flip side of the coin will be high CBOT corn
futures.
“While the bulk of Canada’s oats is for the U.S. milling
sector, there is still a portion that goes as feed,” Tetrault
said. “Because of that there will also be some producers in
Western Canada keeping an eye on those values.”
Plenty of old-crop oats are around, he said, with
end-users having ample coverage at this time. However, new-crop
bids for oats have been slowly increasing as end-users were
starting to get a bit nervous about supply given the prospects of
producers looking at alternative high-paying crops.
New-crop bids for oats in Western Canada currently range
from $3.50 to $3.90 a bushel. Old-crop oats bids were ranging
Chris Beckman, a coarse grains analyst with the market analysis division of Agriculture and Agri-Food Canada in Winnipeg, also felt
the U.S. oats acreage decline would have little effect on the
Canadian oats sector.
“The USDA oats acreage estimate really did not add a lot of
fresh information into the marketplace, with the industry
already anticipating those numbers especially in view of the
competition” between wheat, corn and soybeans, Beckman said.
Based on an initial reaction to the numbers, he said, the
only impact was that demand for Canadian oats from U.S. processors
could increase slightly during 2008-09. However,
Beckman did not have an estimate at this time.
In early March, Canada’s exports for 2008-09 were forecast
by AAFC at 2.2 million tonnes, of which the
majority was expected to be sent to the U.S. AAFC in 2007-08
pegged Canada’s oats exports at 2.3 million tonnes.
