Canada Markets

Thursday's USDA report included an upward revision in expected United States oat imports, with the estimated volume increased by 5 million bushels, to 95 mb, or 1.465 million metric tons. This volume would reflect a 10.5% increase from 2015/16 and would be very close to the five-year average.

Canada's total oat exports, however, are running well-above average. Week 27 data, which covers activity for the week ending Feb. 5, points to a cumulative volume of 703,600 mt exported through licensed handling facilities. This volume is 27.6% higher than seen in the same period of 2015/16 and 15.6% higher than the five-year average, as seen on the attached chart.

As well, unlicensed exports to the United States are above average. As of November, the latest Canadian Grain Commission data points to a total of 270,512 metric tons shipped, up 18.9% from the same period in 2015/16 and 22% higher than the five-year average.

A further look at the export of oat products as of the end of December (rolled, flaked, hulled, pearled, sliced) as reported in Statistics Canada's merchandise trade tables shows a total of 85,154 mt for the August-through-December period, down .6% from the same period last year but 8.2% higher than the five-year average for this period.

January supply and demand estimates released by AAFC shows a 247,000 mt increase in 2016/17 exports from the December estimate to 2.475 mt which would be the highest volume shipped since 2.8 mmt was exported in 2007/08. As of week 27 data, cumulative licensed exports represent 28.4% of AAFC's estimated total exports for the 2016/17 crop year, only slightly higher than the 27.3% five-year average of week 27 exports relative to total crop-year exports. This could support a continued push to move grain as long while the quality holds.

Perhaps it is difficult to determine if we are seeing a true spike in demand or a scramble to own quality stocks. Statistics Canada's recent Dec. 31 stocks estimate was pegged at 2.371 mmt, down from 2.504 mmt a year ago and a four-year low. Extrapolating using the five-year average disappearance for the January-through-July period, ending stocks could be in the vicinity of 650,000 mt which is the current estimate issued by AAFC and would also be a four-year low. The challenge will lie in the quality of these stocks, which will largely consist of lower quality. Back in November, Randy Strychar of oatinfomation.com told the Calgary Herald "You can't make a Cheerio out of barley," and further added, "It's going to be tight."

In related news, a report released this week in the American Journal of Clinical Nutrition points to the benefits of eating whole grains. Their conclusion points to an increase in calories lost due to whole grains in the diet that boost metabolism while reducing the calories retained during digestion. "This study helps to quantify how whole grains and fiber work to benefit weight management, and lend credibility to previously reported associations between increased whole grains and fiber consumption, lower body weight and better health," reported Phil J Karl, the study's lead author in a study.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

© Copyright 2017 DTN/The Progressive Farmer. All rights reserved.