CNS Canada — Oats futures at the Chicago Board of Trade have posted solid gains over the past month, but the cash market in Western Canada remains steady overall.
“It’s been a nice little rally up,” said Scott Shiels, grain procurement manager with Grain Millers Canada on the 35 U.S. cents per bushel rise in the CBOT oats contract since the beginning of January through to Wednesday.
With little fundamental reason for the upward move, he expected the activity in the futures was tied to short-covering.
“When such a small volume is traded, it can literally be one guy who’s short and trying to run things back up,” he said.
On the cash side, spot prices are holding steady around the $3 per bushel mark, with not much activity, according to Shiels.
Looking ahead to spring seeding, he expects to see an increase in oats acres with farmers already signing onto to delivery contracts.
While oats prices may not be that exciting, they’re still profitable and Shiels didn’t think there were many better options out there.
Protein discounts on wheat, malt barley trading near feed prices, and the tariff situation in pulses were also shifting interest away from those crops. Lower input costs and dry conditions favour oats as well.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.