Do Oats Still Know?

As the largest exporter of oats in the world, how will Canadian oats be impacted by tariffs?

Historically, the phrase “Oats Know” suggested that oat futures could predict grain market movements, particularly for corn. However, recent trends show that this correlation has weakened over the past decade, with only occasional instances where oats influenced broader grain markets. 

In 2025, Canada is expected to plant around 3 million acres of oats, with more farmers shifting toward cereal crops. This shift is primarily driven by the profitability of oats compared to other crops grown in Western Canada.  

“Producers in Western Canada are looking to plant more cereal crops in 2025 with more oat acres based on oats economics compared to other western Canada crops,” said Farms.com Risk Management Chief Commodity Strategist Moe Agostino.  “2025 bid prices started at $4.75, then dropped to $4.25 and recently increased to $5.30/bu with Quaker oats.” 

Data from Statistics Canada indicates that oat stocks as of December 31, 2024, stood at 2.19 million metric tonnes (MMT), lower than the five-year average of 2.63 MMT. The decrease in stocks is linked to reduced carry-over from the previous crop year. With this trend, Western Canadian farmers are leaning toward more cereal production, reducing wheat and canola acreage due to rising costs. 

However, expanding oat production comes with challenges, particularly logistical demands at harvest and the need for additional storage. Oat acreage in 2025 is projected to increase by about 6%, though this figure could rise further unless higher canola prices shift planting decisions in the spring. 

Oat futures for December 2025 are currently priced at $3.69, slightly above the 200-day moving average. Market movements indicate a broad, narrowing wedge pattern, with potential price swings in either direction. A downward break could push prices as low as $3.255 or $3.005, while an upward trend may target $4, with drought conditions possibly driving prices above $5. 

As the world’s largest oat exporter, Canada faces uncertainty regarding trade tariffs (announced March 4). U.S. buyers rely heavily on Canadian oats, as sourcing from other regions like Scandinavia is challenging.  

If tariffs persist, prices may decline over time. Although cash prices currently sit at $5.30 per bushel, long-term market shifts could lead to a 25% reduction in value. 

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