Oat supply high heading into the seeding season

With the 2020 seeding season around the corner, one grain trader and marketing manager says oat volumes are larger than normal and there’s a good chance it will “throw the balance sheet out of whack” for quite some time.

“Right now you’re looking at production numbers that are probably the fourth highest in the last 40 years, so we’ve got a significant pile of oats that we’re starting with this year,” says Randy Strychar, president of Ag Commodity Research and Oatinformation.com. “Adding on top of that, we’ve got supply numbers that are probably going to reach 11 year highs. So, to start the crop year we’re probably inundated with more supply than we’re going to need for this crop year.”

He says these numbers are for all of Canada, however; and with Saskatchewan making up more than 50 per cent of the oat crop, it’s something farmers there might be most concerned about.

Contributing to the influx of oats are good returns and above average yields, according to Strychar.

“With the challenging crop year that we had — dry in the summer, very wet in the fall — we weren’t expecting these kind of yields,” he says. “We were expecting ending stock numbers significantly lower … for the current crop ending year of 2019, we’re looking at about 720,000 metric tons which is right on the five year average.”

Down the road, he points to a bigger potential problem in prices, as there will likely be more oat acres than what’s needed.

Listen to the full out market outlook with Randy Strychar in the link below:

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