By Olivia Cooper
OAT values have risen by 10/t in the past six weeks, driven by an extremely strong US market.
Poor crops in Canada and North America have led to a shortage in supply, and Chicago futures jumped from about $76/t (52) in July to $142/t (98) today.
This is the first time that oat futures have climbed above maize prices since 1988.
The US crop is down by a fifth on last year, and low yields in Canada have reduced its crop to 2.8m tonnes, 16% below 2000s production.
Canada is the largest exporter in the Northern hemisphere, and its limited supply means US demand is likely to be met from Scandinavia, says Banks Cargills Richard Whitlock.
“This has given support to EU, and therefore UK, values, putting top-quality milling oats at 70/t ex-farm,” he says.
Meanwhile, feed wheat has eased to around 72/t ex-farm, due to a stronger sterling, weaker US market and lack of world demand.
The US Department of Agriculture increased world wheat and coarse grain production by about 4m tonnes each in this months report, but traders say this was widely expected and markets have hardly reacted.
Glencore Grain says: “In the short term, most attention will be on Argentina, where recent harvest rains could turn traditional exports of good quality soft wheat into feed wheat, further pressuring the world market.”