There were no surprises in this week's Statistics Canada production estimate for oats, with the nation's production estimated at 3.724 million metric tons (mmt), up 16.6% from 2016, while only slightly below the average of pre-report estimates shown by media and only slightly lower than the previous estimate released in September. This marks the highest production seen in four years.
Exports remain at a favorable pace. As of week 18, or the week ended December 3, licensed exports totaled 599,500 metric tons (mt), 27.7% higher than reported for the same period in 2016, as seen by the trend of cumulative exports on the attached graphic (brown line). This is well ahead of the 3% year over increase in exports forecast by AAFC at 2.375 mmt, which includes the export of products.
Over the past five years, week 18 cumulative exports have averaged 18.7% of the total crop year exports reported by Statistics Canada. This five-year average historical pace would suggest 2017/18 exports at 3.2 mmt, an impossible level given competition from feed markets, although does suggest that export projections may be revised higher.
Statistics Canada's merchandise trade database also points to growing demand for oat products. The rolled/flaked export category is up .4% year over year at 37,447 mt (August through October), while the hulled/pearled/sliced/kibbled category shows 16,599 mt moved, up 10.9% from 2016.
Oat futures closed lower for the fourth consecutive week at $2.42/bushel on the March contract. Eastern Prairie oat bids are well below the $3 bids last seen mid-November, while product may be slow to coax out of bins as bids near the mid-$2/bushel range.
DTN 360 Poll
This week's poll asks your thoughts on the latest Canadian Federation of Independent Business November Business Barometer Index for agriculture that shows a slight improvement in the Ag confidence index but remains close to the lowest index indicated for the 13 business sectors monitored. You can weigh in with your thoughts on this poll, which is found at the lower right of the DTN Canada Home Page. Thanks for your input!
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