Oats futures at the Chicago Board of Trade are currently at their strongest levels relative to corn since 2006, as Canadian logistics issues have caused nearby oats contracts to jump higher while corn values hold steady.
The March oats contract gained 16 US cents per bushel on Tuesday, Jan. 28, to close at $4.1675 per bushel, only 15 cents below the March corn contract. At this time a year ago, corn was trading at closer to $2 per bushel above oats, which was more in line with historical averages.
Oats futures also continue to trade at an inverse, with the nearby months above the more deferred positions.
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“It doesn’t mean there are higher prices in the country, as there are very few people actually buying oats,” said Ryan McKnight of Linear Grain in Carman, Manitoba on the relative strength in oats futures. His company was still buying oats “as we can get freight for them,” but he noted that actual bids were very low compared to the futures given the difficulties securing freight.
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Fund buying and the fact that oats stocks in futures delivery positions are tight were playing a part in taking oats futures to “unhealthy highs,” added Mc-Knight. While North American oats supplies are large overall, the “oats are not in the futures delivery warehouses, so the threat of delivery isn’t there… If oats futures were set up the same way as canola, we’d have low oats futures and full carry.”
