(Commodity News Service Canada) — Oats prices across the Canadian Prairies have been increasing of late, and the trend is likely to continue, according to a merchant.
“Producers just aren’t able to find enough at the current basis level, so they are just waiting and strengthening it,” said Ryan McKnight of Linear Grain at Carman, Man.
Although the prices have been strengthening, McKnight said there hasn’t been an overwhelming level of demand for oats, at least at the moment.
“Demand has not been favourable in the short term. Higher prices have been bringing it down,” he said. “The horse market is using fewer and fewer all the time; there’s increased prices for rail freight. The milling demand is down slightly, but that is likely due to the recession.”
McKnight said producers should look to sell their product sooner rather than later.
“I think we will likely see the market highs in the next two or three months, so guys should sell them here in the winter, and sell some new crop,” he said. “The guys who hang on and get greedy are going to end up being disappointed.”
“There will be people who want five bucks (per bushel) and they will sit in the bin for two years and then they will end up selling them at $2.50 (per bushel).”
Crops that came off before the rains in September — about 50 per cent — were of good quality, while anything coming off after that was significantly downgraded, he said.
“Anyone who has low-quality oats, they are going to be hard to move, but eventually the market will use what they have to,” he said.
Elevator deliveries for oats were bringing as much as $3.29/bu. in Manitoba, $3.12/bu. in Saskatchewan, and $3.24/bu. in Alberta, according to Prairie Ag Hotwire. Those prices are as much 24 cents per bushel higher than one week ago.