News on the ‘ol oat trade is sparse at best with the trade not as transparent in regard to price discovery as say wheat or canola. With the domestic trade dominated by a handful of mills and exporters, so what (if any?) are the global impacts that will influence prices leading into next harvest?
Australian Crop Forecasters have estimated that this season sown area is 832,650/ha, which is down from the 5-year average of 979,861ha. However based on heavy summer rain, the early forecast is for a national yield of 1.55t/ha (1.29mmt), which is up on the 5-year forecast of 1.22mmt.
Stats Can released their latest sowing estimate last week, with total area sown at 3.8 million acres (+ 31% from last), however still down from the 5-year average of 4.3ma. Trade estimate that actual sown area is likely to be closer to 3.1ma. As the survey was conducted prior to serious and significant sowing delays and problems in eastern Canadian prairies. The actual figure even may be lower as oats are generally the last crop seeded, especially with much higher returns on offer for canola and wheat (with both crops at record planted acreage).
Back home, old crop milling oat prices have been languishing around $270/t FIS in WA (feed oats $20 discount) since the start of 2011, and recently feed oats have been trading at a premium to FED1. While currently in Victoria milling oats have been bid at $230 into the GV, whilst feed quality is a further $35 discount. Looking forward to new season prices CBH has got feed oats at $245, whilst the FED1 leg of the APW MG contract is at $205, making oats a very attractive option. Mind you the FED1 leg is historically very high at -$80/t.