Nearby oats contracts at the Chicago Board of Trade have trended higher over the past month and spot bids in Manitoba are surpassing the futures, as tightening supplies keep values for the grain well supported.
“The supplies are certainly getting tighter,” said Jarrod Firlotte, general manager of Emerson Milling at Emerson, Man., accounting for the current strength in the oats market.
Bids in Manitoba are currently running above the Chicago futures, with Emerson offering C$4.15 per bushel in the spot market and $4.25 for May delivery.
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The May CBOT oats contract tested the psychological US$4 per bushel level over the past week, and was trading just below that point on March 21. New-crop pricing for September delivery in Manitoba, of C$3.60 per bushel, is right in line with the U.S. futures.
For the new crop, some market participants have said it will take a move above C$4 per bushel to draw more acreage into the crop, but Firlotte said some producers were already showing interest in the current pricing options.
Phone calls were just starting to come in, he said, with some time still to go before planting ideas are finalized.
The area immediately around the Emerson facility may run into issues with spring flooding this year, as the plant sits right near the Red River, where the waterway crosses the U.S. border into Manitoba.
However, Firlotte said, any flooding would be more of an inconvenience than anything else for the plant itself, with trucks being forced to take longer routes around any floodwaters that develop.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
