Farmers in Manitoba are nearly finished the oat harvest and have reported lower-than-anticipated yields, which has helped to boost cash bids for oats in the province, an industry official said.
"A lot of Manitoba farmers reported yields in the 80 to 100 bushel per acre range, which is a little less than normal," said Warren Alexander, a commodities trader with Emerson Milling at Emerson, Man. "The yields are down a little bit because of the hotter than normal conditions this year."
Cash bids for oats in Manitoba have also been on the rise in the last few months as they've been following along with the corn market in the U.S., Alexander said.
Drought conditions in the U.S. have caused the corn crop there to be much smaller than average, which has caused a large rally in prices.
Oat cash bids in Manitoba were in the $3.34 to $3.74 per bushel range as of Thursday, according to data from Prairie Ag Hotwire. This compares with prices from three months prior that ranged between $2.73 and $3.11 per bushel.
An increase in demand for western Canadian and Manitoba oats also generated some of the upward price push seen in the past few months, Alexander said.
Livestock feeders are more interested in purchasing oats as a feed option because it's not as expensive as other feed options such as corn and soybeans, he said.
Slow farmer selling has also added to the price strength in Manitoba oats, he said.
"Farmers have got the crop in the bin and they're anticipating that the price is going to get higher so they're hanging onto the crop," Alexander said.
There is a possibility that oat prices in Manitoba could rally even higher than they are right now, he said, but only if U.S. corn prices continue to surge.
-- Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.