Milling oat markets on the Prairies show signs of stabilizing early this week although they've moved considerably higher since the start of the crop year, as one would expect to happen. As of Saskatchewan Agriculture's Oct. 24 Crop Report, 24% of the province's oat acres remained to be harvested. Given Statistics Canada's harvested acre estimates, this would amount to approximately 279,600 acres or 12.7% of the estimate for Canada's total harvested acres. AAFC's Percent of Average Precipitation map for the Prairie Region showing a significant area in both Saskatchewan and Manitoba receiving 150% or more of average precipitation between Sept. 1 and Nov. 6, which points to the weather-related issues which has undoubtedly taken a toll on overall quality.
Exports are ahead of average. The Canadian Grain Commission's week 13 statistics shows a cumulative volume of 370,700 metric tons exported from licensed facilities, as of Oct. 30, up 20.7% from the same period last year and 13% higher than the five-year average. This is also the highest volume shipped in this period since the 2011/12 crop year. As well, the CGC reports a volume of 73,311 mt of unlicensed exports to the United States in August, up 54% from the same month in 2015.
The October USDA WASDE supply and demand estimates point to total oat import volumes expected to increase 4.7% from 2015/16 to 90 million bushels (1.388 mmt) in 2016/17, while detailed CGC data for the first two months of the crop year points to a year-over-year increase in exported volumes to the U.S. of 12.8% (licensed exports only). On Wednesday of this week, the USDA will release updated supply and demand estimates.
Commercial activity continues to reflect a bullish view of market fundamentals, with the nearby December/March futures spread indicating a bullish inverse of 1/2 cent/bu. (December trading over the March) after moving into inverted territory on Oct. 18, although note that this inverse traded as high as 8 3/4 cents on Oct. 21 and the spread has since been under pressure. The most recent CFTC data, as of Nov. 1, also showed noncommercial traders increasing their bullish net-long futures position for the second straight week to 793 contracts, the largest net-long position seen since early January.
Oat futures have consolidated in sideways trade so far this week and for the second consecutive week.
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