Cash bids for oats in Manitoba have soared to a level near historic highs, industry officials said. Some Manitoba oat farmers were receiving up to $4.00 per bushel as of Oct. 22, Warren Alexander, a commodity trader with Emerson Milling, in Emerson said.
"This price level, historically, seems to be the high," he said. "Prices have really never gone a whole lot higher than this, so we'll see what happens."
Much of the price strength was linked to spill-over support from the advances seen in oat futures on the Chicago Board of Trade (CBOT). CBOT oat values moved higher throughout mid-October, boosted by a post-harvest rally and concerns about tight supplies because of a drought in the U.S., Alexander said.
Strong demand, from both domestic and export sectors, also helped to lift Manitoba oat prices.
Because of the tight supply situation, Alexander thinks prices will manage to stay strong in the near term.
"With all the drought in the U.S., there's not an overabundance of grain," he said. "So, I don't see a reason for prices to come down anytime soon." The strong prices also influenced farmer selling across the Prairies. Alexander said some farmers were "certainly" selling, while others were still holding out to see if prices move any higher.
If prices stay strong, farmers across the province will probably be enticed to plant the same number of acres, if not more, than they did for the 2012/13 crop year, Alexander said.
Manitoba producers planted 550,000 acres of oats in the 2012/13 (Aug/Jul) crop year, according to the Statistics Canada production report released on Oct. 4.