Oat is a plant with the biological plant name Avena sativa, also referred to as its scientific Latin name. Put simply, the name Avena sativa describes that the oat plant is a specific species (sativa) that belongs to a genus of grasses, referred to as ‘avena.’
Quick Overview of Oat
✔️Description and history of oat
✔️The production of oats
✔️Trading oat as an agricultural commodity
Price drivers of oat as a commodity
The uses of oats
Description and history of oat
There are numerous Avena species, including cultivated species, such as Avena sativa, and wild species like Avena fatua (common wild oat) and Avena sterilis (winter wild oat).
Avena sativa, also known as the common oat, is grown for its edible and nutritious seeds, commonly called oats.
Oat is classified as an agricultural commodity and categorised into the category of cereal grains, one of the six categories of agricultural commodities. Other crops included in this category are barley, corn, rice, and wheat.
The other five categories of agricultural commodities are dairy products, meat commodities, oil seeds (for example soybeans and sunflowers), soft commodities like tea, coffee, sugar, and miscellaneous agricultural commodities such as rubber, lumber, and wool.
Oat is a key global commodity because it is regarded as the primary source of animal feed, as well as a source of remarkably nutritious foods for humans.
The history of oat(s)
The exact time and place of the origin of oat remain unknown and narratives about the history of the crop differ significantly, with sources citing numerous possibilities like:
- Oat plants have been growing wild in West Africa since approximately 12000 B.C. When wheat farming commenced in Scandinavia and Poland around 2000 B.C., farmers noticed that oat grew better than wheat in the cold and wet climate of Northern Europe.
- Oats were the last of the major cereal grains to be domesticated, approximately 3 000 years ago in Europe, growing as weeds within cultivated fields of several other crops.
- ‘Oats have been around for thousands of years, the oldest known grains traceable to Egypt’s 12th Dynasty, around 2000 B.C., though the Chinese may have been familiar with them even earlier than that. But unlike wheat and barley, oats were not valued much by the Egyptians and were not actually cultivated by them. In fact, they were regarded as little more than weeds.’
- Oats are mainly of Asiatic origin. Various kinds of the crop probably came from various regions of the Asian continent or Europe, where oat was extensively cultivated before the arrival of Europeans in what is now known as the Americas.
- The earliest settlers brought oat seeds to America, later known as the United States of America. However, oats were considered nothing more than horse feed in this part of the world until the arrival of a German grocer named Ferdinand Schumacher (1822 – 1908) in the mid-1800s. Schumacher, later known as ‘The Oatmeal King,’ saw a promising market for oatmeal in the increasing immigrant population.
- The Scots were certainly not the first nation to cultivate oat, but due to their country’s climate and location, they were among the first to appreciate the potential of the crop. The Scots’ enthusiasm for and fascination with oats have since not weakened.
In fact, once a year, porridge fans gather in the Scottish Highlands Village of Carrbridge to vie for the title of ‘World Porridge Making Champion,’ competing to make the best traditional porridge using only three basic ingredients – oatmeal, water, and salt. On October 8, 2025, the 29th ‘World Porridge Making Championships’ will take place in Carrbridge.
Also, keep in mind that oatmeal is one of the key ingredients of the national dish of Scotland, haggis, described as a savoury meat pudding.
Interesting characteristics of the oat plant
- It is an annual grass crop.
- Reach a height of about 1.5 metres (5 feet).
- An oat leaf has an anti-clockwise curl, contrary to other cereals in which the leaves curl clockwise. Its leaves are wider than other small grains. The leaf blades are smooth at the base and become rough near the tip. The leaves have rough margins.
- It is a tillering plant, meaning that its shoots emerge below the main stem, usually near the base.
- Oat has the ability to survive in poor soils.
- The seeds are elongated, and spindle-shaped. They are generally covered with fine, silky hairs.
- The flowers are yellow.
The production of oats
Oats are grown in many parts of the world, with the European Union (EU) the largest global producer, followed by Russia, Canada, Australia, and the United Kingdom (UK). Poland, Finland, and Spain are the major oat producers of the European Union.
The cultivation of oats requires a dry climate with cold to moderate temperatures, ranging from 15 to 25 degrees Celsius. Rainfall between 80 to 100 mm is preferred.
Oats can be grown in all types of soil, but loam soil is best for the cultivation of oats. The field must be well prepared.
Usually, the oat planting season starts in either the spring season or in late summer.
Oats harvesting depends on the region and harvesting can start as early as 12 weeks after planting. The seeds must have a certain moisture percentage and should be harvested only when conditions are dry.
Trading oat as an agricultural commodity
An individual who is interested to trade oat as a commodity needs to do some homework, attending to measures such as:
- An investment strategy.
- How to diversify his/her investment portfolio.
- Execute a risk assessment, meaning determining the level of his/her willingness and ability to take investment risks.
- Research the oat agricultural market and learn more about the financial instruments available to invest in the commodity.
- Create a budget and apply it. Remember the golden investment rule: Never invest more money than you can afford to lose.
- Decide on a commodity broker
Preferably, a regulated, professional, and trustworthy broker or brokerage. An experienced commodity broker will provide a trading/investment platform and advice regarding the financial instruments available to trade oat as an agricultural commodity.
Examples of financial instruments available to individuals to trade oat:
- Oats exchange-traded funds (ETFs)
An ETF is a derivative financial instrument, allowing traders to trade a commodity without the requirement to physically own the commodity.
ETFs are financial instruments that trade as shares on stock exchanges similar to the trading of the shares of a company.
There are no ETFs available that exclusively focus on oat prices. However, there are several ETFs that trade generally in the grains sector or in agricultural commodities. More information about such ETFs can be obtained from your chosen commodity broker.
- Oats contracts for difference (CFDs)
A CFD is another type of derivative instrument to trade oat as a commodity. CFDs allow traders to speculate on the price of oat. The value of an Oats CFD is the difference between the purchase price of an oat and its current price, also called the spot price, of oat in the commodity market.
- Shares of companies that focus on the agricultural market
Unfortunately, there are no public companies that focus exclusively on oats. Although, traders who want exposure to the price of oat may consider buying shares of large companies, such as Monsanto and Nutrien, that provide seeds, fertilizers, and pesticides to farmers.
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Price drivers of oat
Similar to most other agricultural commodities, the price of oat is primarily determined by supply and demand.
Factors that can affect the price of oat are, amongst others:
- Weather
The cultivation of a crop like an oat depends to a large extent on the weather. Unfavourable weather conditions such as extended droughts or hailstorms could be the end of promising harvests, negatively affecting the supply and price of the commodity.
Contrarily, ideal weather conditions could produce a record harvest and push oat prices downward.
- Oats are primarily used as a feed grain, competing with other feed grains, especially corn. This competition can impact the price of oats. If the price of oats exceeds the price of corn, then farmers might decide to feed their livestock with corn. However, the opposite is also true.
- Interestingly, according to some analysts, the Covid-19 pandemic impacted the oats market positively.
The stay-at-home situations caused by strict lockdowns boosted a culture of ‘cooking-at-home.’ As a result, the demand for healthier breakfast options, such as the varieties of oats, increased, and subsequently the price of the commodity.
The uses of oats
Different types of products are produced from harvested oats, like flour, bran, or flakes, all of which can be utilised to make a wide range of nutritious food products. For example, granola oat bars and oat milk, which consists of steel-cut oats or oat groats that are soaked in water, blended, and then strained with a cheesecloth or a special nut milk bag.
Types of oats that can be used
Depending on how they are processed, oat seeds can be transformed into a variety of oats products:
- Oat groats, also known as hulled whole oats, or hulled oats, refer to the whole oat kernels with only the loose inedible hulls (husks) removed. They are the least processed type of oats.
They are highly nutritious, containing intact germ, bran, and endosperm. They can serve as a substitute for rice or other whole grains.
- Oat bran is processed from the outer layers of the hulled oat kernels and is particularly high in insoluble fibre. It is added to dishes to increase the fibre content.
- Steel-cut oats, also called Irish oats or Irish oatmeal, are groat oats that have been toasted and cut with steel blades into smaller pieces. They have a chewy texture and nutty flavour.
- Scottish oats, or Scotch oats, is considered by historians as the ‘original oatmeal.’ It is a type of oats that is produced by stone-grounding groat oats into a meal, creating a creamy, hearty porridge. This is a process that has been used for centuries.
- Rolled oats, also referred to as old-fashioned or regular oats, are groat oats that have been softened with steam, and then rolled into flakes.
Rolled oats are the most common type of oats and are typically sold as oatmeal. Old-fashioned oats absorb plenty of liquid and hold their shape well when cooked.
- Quick oats, or quick-cooking oats, are oat groats that are steamed for a longer period than rolled oats and rolled into thinner flakes, allowing them to absorb water easily and to cook quickly approximately five minutes.
- Instant oats, also known as instant oatmeal, are usually provided in packets with added flavours and sugar. Instant oats have been pre-cooked, then dried, cut, and rolled for instant cooking, approximately one minute.
Oats and health
Please note: The content about oats and health is solely informative and does not intend to provide any health or medical advice.
According to numerous sources, oats may have the following health benefits:
- As a source rich in protein, oats may be useful for the development of bones and other body tissue.
- Lower cholesterol.
- Reduce the risk of heart diseases.
- Lower blood sugar levels.
- It is a good source of beta-glucan, a unique, soluble fibre associated with several health benefits.
- Oats contain high amounts of various vitamins and minerals, such as copper, magnesium, manganese, iron, selenium, and zinc, to name a few.
- Oats provide powerful antioxidants called avenanthramides.
- Prevent type 2 diabetes.
- Enhance weight loss.
- Soothe skin and relieve skin itching and irritation.
- Help to control high blood pressure.
- Improve digestive health, promote healthy bacteria in the gut, contribute to bowel regularity, and ease constipation.
- Control hunger levels because of the high water and soluble fibre content.
The oat hulls that have been removed from the oat grain can be used for:
- Feed grain for livestock.
- Fuel
- Furfural, a colourless, oily liquid, which is used as a resin or as a solvent. Products containing furfural include, inter alia, lubricating oils, pharmaceutical products, antifreeze, textiles, plastic bottle caps, glue, antiseptics, and buttons.
Note: This article does not constitute investment, financial, or trading advice. Please obtain the advice of a professional and regulated commodity broker before making trading and investment decisions.
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