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Basic Fundamentals


What Market Fundamentals Can Affect The Oats Futures?

The top five oats producers are: Russia, Canada, United States, Poland, and Finland. Oats are a versatile field crop. Oats can be grazed as a forage or harvested for grain. Oats have a high feed value, and oats are useful in crop rotations.

The oats market is thinly traded. It's trading volume is much ligher than corn wheat or soybeans.When you are considering a trade in oats market some of the basic fundamentals that you should consider are:

1. Weather Weather affects yields, and therefore it is a major factor that affects the price of all grains including oats. Oats have a lower summer heat requirement and greater tolerance of rain than other cereals like wheat, rye or barley, so are particularly important in areas with cool, wet summers such as northwest Europe. Oats are very cold tolerant, but not freeze proof. Freeze damage can occur when warm late fall or winter growing conditions are followed by sudden extreme temperature drops.

2. Oats Diseases Oats are susceptible to a large number of diseases that may damage or totally destroy individual fields. Among those causing severe direct damage are crown and stem rusts, leaf blotch caused by Pyrenophora spp. and Septoria spp., and BYDV. Oat diseases can cause severe economic losses because of their effects on yield and quality of grain and forage.

3. Health Benefits Medical research that has shown the heath benefits of oats has boosted the demand for oats. Oats are an excellent source of iron, dietary fiber and thiamin. They also contain antioxidants that are believed to protect the circulatory system from diseases such as arteriosclerosis, which affects the arterial blood vessel. Oats help stabilize blood sugar, reduce cholesterol, regulate the thyroid, and soothe the nervous and digestive systems.

4. The Relative Price of Competing Crops As a feed grain, oats pricing tends to run in line with corn. The oats market will often track changes in corn production and demand. Therefore, by looking at the price projections for corn you can attempt to estimate future price movements of oats. Some traders prefer to trade the oats market over the corn market because it is less volatile, and the margin requirements are lower.

These are just some of the basic fundamentals to keep in mind when you are considering a trade in the oats market. Before opening up a commodity account to trade oats you should consult with a licensed commodity broker that follows the oats market to discuss investment strategies.

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Commodity trading is not suitable for everyone. The risk of loss in trading can be substantial. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Carefully consider the inherent risks of such an investment in light of your financial condition. Past results are not necessarily indicative of future results. Please do your own research before investing in the futures market. This site contains no investment recommendations. The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness.