March oats have gained 36 1/4 cents since Nov. 30, reaching a fresh contract high on Dec. 7, 8 and 9.
December hasn't historically been an active month for oat trade, with the March contract closing lower over the month of December in four of the past five years, while averaging a 7 1/4-cent loss during the month of December over this period.
While not shown, the long-term continuous active weekly chart shows nearby resistance at $3.37 3/4 per bushel, which is the 50% retracement of the move from the 2014 high to 2016 low. The 2020 high of $3.50/bu is the next target, while a breach of this level would see the highest trade in over six years on the continuous chart.
Also not shown, the most recent CFTC data as of Nov. 24 shows noncommercial traders increasing their bullish net-long position in oat futures, during a week when the same group reduced their net-long positions for hard red spring wheat, soft red winter wheat, hard red winter wheat, corn, soybeans and canola.
Based on the USDA's November estimates, U.S. production is higher than the five-year average, while ending stocks were forecast as the highest in three years. In order to achieve this, imports are forecast at 94 million bushels in 2020-21 (1.450 million metric tons), which is up slightly from 2019-20 and the highest volume imported in six years.
Meanwhile, the International Grains Council posted a chart of global oat consumption, with the forecast for 2020-21 appearing to be the highest in four years with a reported uptick in global demand for both feed oats and human consumption oats.
The recent move is also despite Statistics Canada revising higher their oat production forecast from earlier forecasts to 4.576 mmt, the highest estimated production in 13 years, up 8.2% from 2019 and 26.7% higher than the five-year average. Prior to this report, AAFC was forecasting Canadian stocks to increase by 174,000 metric tons year over year, while Statistics Canada has since increased their production estimate by 73,100 metric tons.
The oat data bears watching in the December USDA data release.
Cliff Jamieson can be reached at email@example.com
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