Oats futures have been slowly recovering after many months of decline. Is this recovery trend sustainable?

Oats represent a major food source and currently rank sixth in the global production of cereals, after corn, rice, wheat, barley and sorghum. The Canadian oats market has been through a pretty wild ride over the past few years. The world's leading oats supplier has surged from dangerous lows to record highs and back again, leaving many in the industry confused about price forecasts.

Like many other commodities, the oats market has not been immune to supply chain disruptions during the pandemic. But a sharp rise in demand, driven largely by the oat-based dairy alternative industry, further exacerbated by a devastating drought in the Canadian crop fields, has led to Canadian oat supplies falling to a 19-year low in 2022, CME Group Oats Futures A were at record highs. The global oats market was estimated at $6.1 Billion in 2022 (the market size reached a volume of almost 28.78 million tons in the year 2023) and is projected to reach $10.8 Billion by 2032, at a CAGR of 5.9% from 2022 to 2032.

The dramatic increase in oat production revolutionized the oat market. Supply chains that were nearly empty last year are quickly filling up, with oat stocks expected to be nearly 1 million tons above average in 2022-2023. Oats prices and nearby CME Oats futures began a downward trend that has since struggled to recover.