Total futures open interest was higher based on Tuesday's trade. Gains were noted again in all months. More fund buying. Open interest has climbed to highest level in six years.
Metric tonne corn/oat spreads widened further this week with oats continuing to gain on corn. The widening of spreads continues to reduce the already low feed demand for oats in the U.S. Oat spreads are moving towards a carry this week as nearby cash demand slows.
Market commentary
Oat futures closed marginally mixed again today on light volume bear spreading. Front-end oat prices continue to lose ground to back end months on the slow down in nearby cash demand. New crop trade continues with growers taking advantage of some of the highest oat prices they've seen in years. Sales for new crop to-date are estimated at near 0.500 mmt. Most mills report they are filled for Aug/Sept positions with Oct-Dec filling quickly. Good demand remains for January forward.
Friday's USDA plantings intentions report is the focus for the moment. Once the numbers are out, look for the market to focus on the pace of seeding and weather in Canada and the U.S. Moisture conditions are report as mostly good in the U.S. Excess moisture is reported in northern Canada. While not critical at the moment, the moisture levels remain a concern to timely seeding.
Activity remains slow in cash oat markets with near term fundamentals in relatively good balance. Cash basis levels in Midwestern US markets remain steady along with mill bids in Western Canada.
Ag Canada raise oat ending stock forecast
Agricultural Canada released today their latest supply and usage outlook for oats. They increased 06/07 ending stocks to 0.800 mmt, up from 0.600 mmt last month. No explanation was given for the increase. Most traders are looking for ending stocks of between 0.700 and 0.775 mmt.
Canadian growers vote to end CWB barley monopoly
Canadian farmers voted 48.4% in favor to end the Canadian Wheat Board's monopoly on western barley sales by Aug 1, 2007 the Canadian Government announced this morning. More than 29,000 western farmers mailed in ballots in the non-binding plebiscite, with 37.8% voting to keep the CWB's monopoly on barley sales to maltsters and export markets, while 13.8% voted to remove the agency from barley sales altogether.
The Canadian government also indicted they would hold a farmer vote on whether to end the wheat monopoly, but had no timeline for that plebiscite. The CWB's board of directors announced yesterday they might bow out of the barley business altogether if the government ends the monopoly. The CWB does not own any handling facilities and the government would need to give it time and money to buy elevators and port facilities to compete with private-sector grain companies.
Sask Pool gets OK from Competition Bureau
Saskatchewan Wheat Pool said on Tuesday it would sell nine elevators and one port terminal to the Canadian division of Cargill Inc. to satisfy antitrust regulators in its hostile bid for Agricore United. Saskpool, Canada's No. 2 grain company, said in a release it has a consent agreement with Canada's Competition Bureau and a sales agreement with Cargill pending success in its offer for Agricore, the country's biggest grain handler. Saskpool's most recent offer was rejected by Agricore's principal shareholder, ADM and trumped by a friendly offer from privately held James Richardson International Ltd., Canada's No. 3 handler. Saskpool extended its bid to April 11, but it has not said whether it will sweeten the offer in light of JRI's bid.
Grower selling recommendations
We have updated our latest oat grower sell recommendations. They can be found at the Grower sell recommendations.
More market information is available at Oatinsight.com
- Futures price trends
- Supply and usage estimates
- Crush prices
- Canadian weekly stats
The information contained our reports are based on various sources that we believe to be reliable. However, we do not guarantee the accuracy nor the completeness of this information. We accept no responsibility for the use of opinions expressed herein when used for commercial purposes.
