The Learn About Futures Insider for May 27, 2010 : Oats

The Learn About Futures Insider:
Oats​

This cereal grain has a rich history of cultivation and has been used for both human and animal consumption for centuries. The CME Group futures contract - to which the following specifications will refer - provides a means for participants to engage in possible fair price discovery, attempt to manage or hedge price risk, and evaluate possible supply and demand trends.
Contract Size: 5,000 Bushels
Price Quote & Tick Size: Cents per bushel; minimum fluctuation is ¼ cent per bushel ($12.50 per contract)
Contract Months: March, May, July, September, December

Trading Specs: Trades open outcry and Globex (electronic) per the following schedule:
Electronic: 6:00 pm - 7:15 am and 9:30 am - 1:15 pm Central Time, Sunday - Friday
Open Auction: 9:30 a.m. - 1:15 p.m. Central Time, Mon-Fri.

Daily Price Limit: $0.20 per bushel expandable to $0.30 and then to $0.45 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.
Trading Symbols: Open Outcry - O; Electronic - ZO

Oat Facts​

At least thirteen species make up the classification tables for oats, but the one most cultivated is the common oat - all 146 varieties of it. Early civilizations believed oats were contaminated wheat, but cultivation moved forward once it was recognized as a separate grain. Oats have a higher tolerance level for rain than other major grains, and require fewer hot summer days. These attributes likely contributed to the widespread cultivation of oats across more temperate growing regions.

Oat acreage in the United States has been on the decline since the beginning of the last century. This coincides with the fact that oats were often used as a feed grain for horses. As the number of horses within the United States declined after the introduction of the automobile, the need for oats have dropped as a result.

Alternately, the demand for other cereal grains may have been a contributing factor. Either way, the projected net return for an acre of oats is well below that of the other major planted grains, according to the USDA's projections.

Oats are normally sown early in the spring or summer, since they are tolerant of cold, late frosts, and snow. The grain will normally go dormant in the summer heat. According to the USDA Agricultural Statistics Board's 1997 report, the usual planting time for oats in the top five producing states is between April and May. The harvest period usually extends from July through the beginning of August.
Like some other grains, oats have fertilizer and other input requirements. After harvesting, oats are cleaned, sorted, de-hulled, and then finished by either flaking or milling.

Key Uses​

Oat hulls may be used as feed or processed into oat fiber. Flaked oats become the familiar "rolled oats", and milling produces oat flour and oat bran. According to the World Health Organization, oats may have the highest protein level of any cereal grain, nearly equal to meat, milk, and egg protein.

Oats may also be used in beer or found in skin treatments. Oat straw may be used by livestock producers as bedding.

Key Concerns​

Weather - As with many field crops, weather conditions during planting, growing, and harvesting stages may impact progress.
Disease and Pests - Although reasonably free of pests and disease issues, there are a few leaf diseases which may impact oats. Leaf rust and caterpillars are key concerns. Some weeds may complicate harvest or impact yield.
Reports - Oats are included in key USDA reports such as Crop Progress, Crop Production, and the WASDE.

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