Oat Bids Still Under Pressure From Railcar Shortage

While oat supplies will be tighter than normal this year, problems getting the crop to market continue to put downward pressure on cash bids in Western Canada.

“Oats is going to remain a tight supply, tight shipping market,” says Lorne Boundy, a Winnipeg-based oat merchandiser with Paterson Grain, in the following interview.

The federal government’s minimum weekly grain shipping requirements for CN and CP Rail have led both railways to favour high volume runs to the West Coast, rather than allocate cars for grain shipments south into the U.S. — the final destination for the majority of Canadian oats.

The logistical challenges for oats will likely hang around through the 2014-15 crop year, suggests Boundy.

“We need certainty of car supply to the United States,” he says. “It’s not isolated just to oats. There are a number of wheat mills (in the U.S.) that are still receiving quite poor service, especially since most mills are not 100-car served places.”

In addition to the shipping challenges, there are also concerns about the quality of the oat crop. High quality oats will command a premium, says Boundy, noting mildew and sprouting have been reported following the rains over the last few weeks.

Related: The US Crop Tour Estimates, StatsCan Numbers, and Harvest Begins

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