The latest USDA report trimmed the United States expected carryout for oats in 2017/18 by 10 million bushels from the February estimate to 20 mb (308,452 metric tons). This level is down 30 mb or 60% from the estimate for 2015/16 and would be the smallest carryout shown in USDA data going back to 1975/76. This would be 54.5% below the five-year average and 65% below the 10-year average carryout.
This move was realized due to a 10% reduction in expected imports in the June 1-May 31 crop year to 90 mb. The USDA's March 12 Feed Outlook points to slower-than-expected imports from Canada. Despite the tighter stocks expected, the range of producer prices was increased by a nickel on either end to $2.55 to $2.75/bushel.
As reported by Statistics Canada tables, Canada's oat exports to the U.S. have declined in each of the past four months ending in January, falling from 199,213 metric tons in September to 117,610 mt in January. Given data for the U.S. crop year (June through May), Canada's exports are 81,347 metric tons or 7.3% behind the previous crop year in the June through January period at 1.028 million metric tons, while the USDA has left their import estimate at 90 mb (1.388 mmt), unchanged from 2016/17.
Current rail issues could be partially behind the slowing in movement out of Canada. According the Ag Transport Coalition, as of week 31, CN Rail has spotted 91% of the cars wanted for loading in the country for U.S./Mexico shipment, while CP has spotted 93%. This results in a 1,178-car unfulfilled demand to-date for all southbound grains. When one considers the timeliness of these orders being spotted in the country for loading, since the beginning of the crop year, CN has spotted 69% of the cars for loading in the week wanted, while CP has spotted 70% of the cars in the week wanted.
The tighter stocks forecast by the USDA have had little effect on the expected average return to U.S. farmers. The range of the average farm price is noted at $2.55 to $2.75/bushel, a nickel stronger on either end of the range from last month and roughly $.59/bu higher on average than the estimate for 2016/17.
According to the latest AAFC estimates, North American oat acres will rise in 2018. The USDA will release quarterly stocks estimates on March 29 that bears watching.
DTN 360 Poll
This week's poll points to the International Energy Agency forecasting that Canada's oil-by-rail movement will double from historical highs over the next two years, while asking if the agriculture industry should be concerned. You can weigh in with your thoughts on this poll, which is found, at the lower right of the DTN Canada Home Page.
Cliff Jamieson can be reached at email@example.com
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