Prairie oats at tipping point

oats
(Doug Wilson photo courtesy ARS/USDA)

CNS Canada –– Seeding delays in Western Canada could see more area shift into oats, which need a shorter growing season and minimal inputs compared to other options.

However, with many fields still unharvested from last year, a tipping point will eventually be reached when nothing will be seeded at all in some areas.

In the first Statistics Canada acreage survey for the 2017 growing season, seeded oats area was forecast at 3.4 million acres, which would be up 20 per cent from the previous year.

“It will be interesting to see what happens,” said Scott Shiels, grain procurement merchant with Grain Millers Canada at Yorkton, Sask.

Disease pressures in wheat were already drawing more interest into oats this spring, he said, with the persistent seeding delays creating even more interest in the relatively low-risk yet versatile crop.

Actual area could be up by 30 per cent or more on the year, he said, if the weather co-operates from here on out.

“As we get later seeding, that probably means more oats,” said Shiels. However, “there is a tipping point where it will start meaning nothing and rather than seeing more oats, we’ll see less and we could be looking at a rally.”

He noted farmers in a large portion of Saskatchewan’s oat growing region “don’t even have last year’s crop off and every time we turn around, they’re getting more rain.”

If those fields still aren’t being seeded by June, they may not be seeded at all. “It’s on a bit of a teeter-totter,” said Shiels.

From a pricing standpoint, oats futures at the Chicago Board of Trade fell off their nearby highs in recent sessions, but Shiels noted the futures are no longer a good indicator of Canadian cash prices.

Prairie Ag Hotwire is currently quoting spot oats prices as high as $3.15 per bushel in Saskatchewan and $3.25 per bushel in Manitoba.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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