Oats are seeds or grains of a genus of plants that thrive in cool, moist climates. There are about 25 species of oats that grow worldwide in the cooler temperate regions. The oldest known cultivated oats were found inside caves in Switzerland and are believed to be from the Bronze Age. Oats are usually sown in early spring and harvested in mid to late summer, but in southern regions of the northern hemisphere, they may be sown in the fall. Oats are used in many processed foods such as flour, livestock feed, and furfural, a chemical used as a solvent in various refining industries. The oat crop year begins in June and ends in May. Oat futures and options are traded on the Chicago Board of Trade (CBOT).

Prices – Oat prices on the CBOT weekly nearest futures chart showed weakness in early 2010 and hit a low of $1.89 per bushel in May 2010. However, oat prices then staged a sharp rally through the remainder of the year, finally closing 2010 up 42% at $3.94 per bushel.

Regarding cash prices, the average monthly price received by farmers for oats in the U.S. in the first eight months of the 2010-11 marketing year (June/May) rose +43.7% yr/yr to $3.21 per bushel.

Supply – World oat production in 2010-11 fell -14.5% yr/yr to 20.102 million metric tons, a new record low. World annual oat production in the past three decades has dropped very sharply from levels above 50 million metric tons in the early 1970s. The world’s largest oat producers are the European Union with 37.8% of world production in 2010-11, Turkey 15.9%, Canada with 11.4%, Australia with 8.7%, and Russia with 5.9%.

U.S. oat production in the 2010-11 marketing year fell 12.8% yr/yr to 81.190 million bushels, which is a new record low. U.S. oat production has fallen sharply from levels mostly above 1 billion bushels seen from the early 1900s into the early 1960s. U.S. farmers harvested only 1.263 million acres of oats in 2010-11, which was down –8.4% from the previous year and posted a new record low. That is down from the almost 40 million acres harvested back in the 1950s. The oat yield in 2010-11 fell -4.7% to 64.3 bushels per acre. Oat stocks in the U.S. as of September 2010 were down –8.9% yr/yr to a 116.972 million bushels. The largest U.S. oat-producing states in 2010 were the states of Minnesota (with 14% of U.S. production), Wisconsin (12.1%), South Dakota (9.3%), North Dakota (7.9%), Pennsylvania (5.8%), and Iowa (5.3%).

Demand – U.S. usage of oats in 2010-11 rose 1.2% yr/yr to 194.000 million bushels, up from 2008-09 record low of 186.380 million bushels. Regarding U.S. usage of oats in 2010-11, 59.3% was for feed and residual, 34.7% for food, alcohol and industrial, 4.5% for seed, and 1.5% for exports.

Trade – U.S. exports of oats rose 38.8% to a mere 3.0 million bushels in 2010-11. U.S. imports of oats in 2010-11 fell -5.2% yr/yr to 90.0 million bushels, down from the 2007 record high of 123.29 million bushels.

Excerpted from the CRB Commodity Yearbook. For more information on CRB products click here

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