April 29 – Oats Weekly GrainCents Digest

Markets were paying close attention to acreage reports out of Canada and the slow development of China as an export market for Canadian farmers.

An uptick in U.S. wheat prices couldn’t help push oats prices higher this past week. Instead, markets were paying close attention to acreage reports out of Canada and the slow development of China as an export market for Canadian farmers. Before we jump into the major developments this week, let’s take a look at the weekly performance of oats prices in Chicago.

  • May 2018: -4.7% or -11¢ to $2.215 USD / bushel
  • July 2018: -1.7% or -4¢ to $2.32 USD / bushel
  • Dec 2018: -2.8% or -7.2¢ to $2.463 USD / bushel

 

Oats Expected Acres in Canada

This past Friday, on April 27, Statistics Canada released its farmer-survey-based results of 2018 acreage intentions of Canadian farmers. Going into the report, the market was expecting to see a number from StatsCan between 3 and 3.2 million of oats.

StatsCan said though that Canadian farmers will plant 3.15 million acres of oats in 2018/19. This is down 2% from the year before, with both Saskatchewan and Alberta seeing a slightly lower area for the cereal crop.

According to StatsCan, Saskatchewan will plant 1.55 million acres of oats, down about 100,000 acres, or 7%, from the year before. Next door in Alberta, 680,000 acres of oats will be seeded, down just 10,000 acres, or 2% from the year before. It’s worth mentioning that these reductions were slightly offset by bigger oats acreage in Ontario and Quebec.

Ultimately, the report could be viewed as neutral for oats prices. For new crop oats futures values, we saw a downtrend reversed on Friday. We’ll see if this can maintain going into Plant 2018 (just like other crops, oats seeding is a bit behind in the US and will certainly be behind in Canada, but this just might mean more acres).

On the Canadian crop movement front, a strong weekly pace of the oats exports was reported through Week 38 (ending April 22). We continue to hear reports saying demand from China is expected to strengthen but we remain a bit skeptical of their validity.

To sum up. 2018/19’s oats acres in Canada are expected to shrink by 5%, which is a bit of a contrast to Ag Canada’s current estimate of 3.274 million acres, up 2.3% year-over-year. As mentioned this larger number could easily be realized the later that the Western Canada Plant 2018 campaign starts.

From a new crop perspective, there are $3 CAD/bushel handles and better being seen in Manitoba and Alberta, while Saskatchewan is seeing more bids around that $2.80 number. We have seen some $3 handles for new crop oats in Saskatchewan, but movement is basically this time next year (Apr/May/June)

Right now, we are 60% sold in 2017/18 old crop, and 0% sold in 2018/19 new crop.

We’ll continue to watch for any weather premiums but new crop oats prices could be volatile as buyers look to get coverage in the coming months. As such, we’re not opposed to you posting new crop oats on the FarmLead Marketplace but it’s okay to be patient.

Have a great week!

– Brennan, Garrett, and Adrian

 

 

 

April 27 – StatsCan Expects 3.15 Million Acres of Oats in Canada in 2018/19

April 25 – A Silver Lining Ahead for Canadian Oats Growers?

April 22 – Oats Weekly GrainCents Digest

April 19 – Did You Know Your Oats Are Being Turned to Milk?

April 18 – What Could Canadian Oats Supply and Demand look like in 2018/19?

April 18 – Who’s Running The Show for US Free Trade?

April 18 – A Comparison of US and Canadian Oats Numbers

April 15 – Oats Weekly GrainCents Digest

April 12 – What Could US Oats Supply and Demand Look like in 2018?

About the Author
Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.