AM Market Report – July 16, 2025 | The Western Producer

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are retracing $4 to $5/tonne lower to start this morning, pressing into overnight session lows. Chicago soybean futures though are bouncing up 9 cents/bu this morning after stumbling yesterday from reports of improving US soy crop conditions.

Chicago corn futures are extending their corrective gains off recent contract lows…trading another 3 to 5 cents higher this morning. Short-covering and bargain buying are supporting corn. “We remain fundamentally constructive on CBOT corn and see value for consumers at current levels,” analysts at JPMorgan said, calling the market oversold.

US winter wheat markets are down 1 to 2 cents, while spring wheat futures are mostly a penny higher.

Traders continue to monitor sweeping tariffs proposed by US President Donald Trump amid uncertainty over how potential retaliation against the duties could affect US export sales.

In Other News

– Bruce Burnett’s July Crop Tour Update… Western Producer markets desk analyst Bruce Burnett completed a crop tour of the Prairie region conducted over the past few days. He says crops generally looked decent in southern Manitoba and southeast Saskatchewan, but took a turn for the worse in south-central and southwest Saskatchewan and parts of southern Alberta, where they need moisture. “We need to get more than some of these little scattered rains that we seem to be getting,” he said. “We need to see a general rain across the southern grain belt, just to help fill things out and preserve the yields that are there.” Conditions improved as he drove north into the central and northern Prairie region.

Bruce is currently forecasting an average Prairie canola yield of 38.6 bu/acre, which is about the same as last year. There are some nice-looking crops in the central and northern areas of the Prairies, but there’s still a fair amount of canola production in the south. “And those yields were certainly sub-20 (bu/acre). A lot of fields were sub-15,” he said.

Burnett is forecasting canola production at 18.57 MMT, a 549,870 tonne drop from last year.

Spring wheat yields are pegged at 51.5 bu/acre, which would be similar to last year. Production is forecast at 25.7 MMT, nearly identical to last year.

Durum is the crop that will be hardest hit by the early-season drought with an average yield of 31.4 bu/acre, down 2.4 from last year. Production is forecast at 5.48 MMT, down 331,950 tonnes from last year. That is problematic because carryout will be small after a robust 2024-25 export program. “That certainly makes the durum market situation a little more interesting,” said Burnett.

Barley yields are forecast at 64.3 bu/acre, up 1.2 from last year. Production is estimated at 7.61 MMT, a 221,869 tonne drop.

Oat crops looked excellent with an average yield of 94.8 bu/acre, up 2.8 from last year. Production is forecast at 3.32 MMT, a 211,415 tonne increase.

The pea crop looks very promising with a forecast yield of 36.6 bu/acre, up 1.7 from last year. Production could rise by 423,580 tonnes to 3.41 MMT. “There are a lot of nice pea fields,” he said.

Lentil crops are looking better than durum crops, but yields will be down from last year. Production is forecast at 2.35 MMT, down 83,169 tonnes from last year.

Burnett provided the caveat that mid-July forecasts are unreliable. Last year’s crop was looking promising at the time of the AIM show and then faltered in the late-July heat. But that isn’t in the forecast this year. “It’s looking like it’s going to be moderate with normal temperatures and good chances of rain,” he said.

– Carney says chances are low for tariff-free trade deal with US… Prime Minister Mark Carney says he sees little evidence that it’s possible to strike a deal with President Donald Trump that removes all US tariffs on Canadian goods. This is the first time the Prime Minister has acknowledged that a pact to end the Canada-US trade war would leave some of Trump’s protectionist tariffs in place. Canada and the US are in negotiations to end a four-month trade dispute that has seen both sides impose tariffs starting with Trump in March.

Carney underscored his focus on Canada’s industrial base, saying a strong economy “includes a strong steel industry, auto industry, aluminum industry, and copper industry.” Carney is in Hamilton this morning…expected to make an announcement of the steel industry. The White House has said the threatened tariffs would not apply to CUSMA-exempt goods, though Trump has increasingly sidestepped the accord with unilateral import taxes.

– Australia nears breakthrough canola deal with China… Canberra is close to an agreement with Beijing that would allow Australian suppliers to ship five trial canola cargoes to China (0.15 to 0.25 MMT), a move towards ending a years-long freeze in the trade. China, the world’s largest canola importer, sources nearly all of its imports from Canada, but those supplies could be limited by an anti-dumping probe Beijing is conducting. China imposed 100% tariffs on Canadian canola meal and oil in March amid strained diplomatic ties.

Australia, the second-largest canola exporter, has been shut out of the Chinese market since 2020, mainly due to Chinese rules to stop the spread of fungal plant disease, but the trial cargoes could reopen trade and reduce Canada’s market share. Chinese and Australian officials are finalizing a framework to address Beijing’s phytosanitary requirements aimed at preventing the spread of blackleg disease, according to two Australian agriculture industry sources briefed on the negotiations. “It looks like we’ve found a pathway that works for everyone,” said one of the sources. “Now we need to run a few ships and see if it all works.”

The Australian government expects the upcoming harvest later this year to produce 5.7 MMT of canola, the least in five years, due to unfavourable weather and a smaller planted area. Of that, Australia will likely export around 4 MMT of canola, much of which may be earmarked for longstanding customers in Europe and elsewhere.

– Record June US soy crush tops expectations… Members of the US National Oilseed Processors Association (NOPA) crushed 185.7 million bu of soybeans during June. While that was down 7.1 million bu (3.7%) from May, it was up 10.1 million bu (5.8%) from last year’s previous high for the month.

NOPA implies the full June US soy crush of 197.3 million bushels. At that level, crush would stand at 2.042 billion bu through the first 10 months of the 2024-25 US marketing year, leaving 378 million bu to reach USDA’s forecast of 2.420 billion bu, up 4.7% from the final two months of last year.

US soyoil stocks held by NOPA members as of June 30 fell to 1.366 billion lbs, down 0.5% from the end of May and 15.8% below year-ago.

– France sees soft wheat crop rebounding 27% in 2025… France’s farm ministry has forecast the country’s 2025 soft wheat production at 32.6 MMT, up 27% compared with last year’s rain-hit harvest and in line with market expectations. France, the European Union’s biggest grain producer, harvested its smallest wheat crop since the 1980s last year after torrential rain and below-normal sunshine disrupted planting and hurt plant development. Crops have benefitted from less severe conditions this year, though recent drought and heatwaves created uncertainty over final yields. The ministry’s first production outlook for soft wheat was in keeping with most forecasts by analysts around 32-33 MMT.

For barley, the ministry projected total 2025 output at 11.8 MMT, up 19.1% from 2024 and 6.2% above the 5-year average.

For rapeseed, it forecast this year’s crop at 4.2 MMT, up 8.2% compared with last year.

– French wheat exports to more than double… In its first outlook for the 2025-26 season, France’s ag ministry forecasts French wheat exports outside the EU will jump 114% from last year’s historic low of 3.25 MMT to 7.5 MMT. French wheat exports within the bloc are forecast at 6.72 MMT, down 0.5% from 2024-25.

– Algeria buys 1 MMT of wheat… Algerian state grains agency OAIC has bought between 1.05 to 1.08 1 MMT of milling wheat in an international tender which closed on Tuesday. Purchases were reported in a range, with buying reported at US $253, $255 and $257/tonne, cost and freight (c&f) included. The wheat is optional origin, but first assessments were sourced from the Black Sea region, possibly including Ukraine, Russia and Bulgaria. In its last reported tender on June 17, the OAIC bought milling wheat at around US $244.50 to $245/tonne c&f.

– US pulse group commits to doubling production in five years… The US pulse crop industry has plans to double production and consumption by 2030, USA Pulses announced at their annual conference held in Spokane, Washington.

Farmers in the US grew 1.4 MMT of edible beans in 2024, 756,550 tonnes of peas, 410,460 tonnes of lentils and 255,460 tonnes of chickpeas, according to USDA data.

Seeded area of all four crops was slightly higher in 2025. Dry edible bean seedings are estimated at 1.6 million acres by the USDA, up 4% on the year. Lentils are up 7.9% at 1.01 million acres, peas up 9.6% at 1.07 million acres and chickpeas up 7.6% at 540,000 acres.

The goal to double US pulse consumption and production “is rooted in the belief that pulses are nutrient-dense, sustainable crops that offer tangible solutions to the world’s most pressing issues,” said USA Pulses in the news release, adding that “from combating chronic dietary diseases to improving farmland health and food resilience, pulses are positioned to be a major must-have in diets and cropping systems worldwide.”

– Texas braces for screwworm threat… Texas and US federal officials are ramping up screwworm monitoring efforts as outbreaks in Mexico inch closer to the US border, threatening the state’s $15 billion cattle industry. USDA and state labs, in partnership with Texas A&M, are deploying a five-point defense plan that includes border inspections, sterile fly releases and major facility upgrades. At a US House Agriculture subcommittee hearing, lawmakers warned that a Texas infestation could cause up to $4.3 billion in producer losses annually, a total economic loss of over $10 billion and disrupt the US national food supply.

The screwworm infestation is now one Mexican state away from crossing into Texas. Feedlot operators in Alberta are watching this closely. If screwworm moves into the US, the Canadian border may close to US feeder cattle. In 2024, Canada imported 400,060 cattle from the US. Most of these imports were Holstein cross feeder cattle. Late in the week, certain buyers were extremely aggressive on light-weight steer calves as the fear started to percolate.

Outside Markets

The Dow Jones Industrial Average tumbled 436.36 points lower on Tuesday to settle at 44,023.29, while the S&P 500 Index dropped 24.80 points to 6,243.76. Early Wednesday, September Dow Jones futures are bouncing back, up 152 points.

Global stock markets were under pressure yesterday after US inflation data suggested Trump tariffs are pushing up prices, dampening expectations for US Federal Reserve policy easing. US and European stock markets are slightly higher this morning. TSX futures were little changed this morning after Canada’s main stock market closed yesterday off Monday’s record high.

“We know the revealed preference of Fed Chair Powell, along with a few of his colleagues, is to wait for these tariff impacts to come through, and those in that camp are seeing that view bolstered by this data,” said Taylor Nugent, senior economist at National Australia Bank.

The September US Dollar Index is up 0.100 at 98.410. The Canadian dollar weakened against its US counterpart…currently quoted at 73.01 US cents.

August crude oil futures are down $0.85 at US $65.67/barrel. Oil prices are weaker in a tight trading range. Signs of firm summer demand in the world’s two largest consumers, the United States and China, competed with concerns about the wider economic impact from US tariffs.

Grain Markets

Chicago soybean futures are trading 9 cents/bu higher this morning. Bean futures slipped 5 to 6 cents lower on Tuesday. Nov bean futures are up 9.75 cents at $10.11/bu…showing some life following a test and successful defense of the $10.00 level.

70% of the US soybean crop is rated good to excellent, up 4% on the week and the highest rating for this point of the season in a few years. Also, near-term US crop weather remains favorable.

The US announced a preliminary trade deal with Indonesia includes commitments to purchase $4.5 billion in ag products. This could be supportive of soybeans in the long run as the oilseed tops the list of ag goods exported by the US to Indonesia…and Indonesia is within the top five US soybean buyers, albeit quite a bit below Mexico and China who take the first two spots in the rankings by a wide margin.

Soymeal futures are bumping up $3/ton this morning, recovering all of yesterday’s declines. Soyoil futures are up a very modest 2 to 10 points right now, but adding to Tuesday’s 30 to 43 point gains.

NOPA from Tuesday showed a total of 185.7 million bu of soybeans crushed in June, above trade estimates and record large for the month. US soyoil stocks tallied a lower than expected 1.366 billion lbs…the lowest June stocks in over 20 years. Big bean crush but still lower soyoil stocks suggests solid demand expectations linked to biofuels.

Chicago corn futures are mostly 3 to 5 cents higher this morning…adding to Tuesday’s 1 to 2 cent gains in the nearby contracts and attempting a third positive session in a row to begin this week.

Although the bounce in corn futures through the week thus far feels mostly like a technically driven move, rumors of pollination issues in some areas throughout the US Corn Belt may also be encouraging some speculators to take a chance on the long side. The market will certainly be alert and interested to find out more during a crucial timeframe for corn development.

Still… 74% of US corn is rated in good to excellent condition, with crop development running just ahead of average nationally, adding to the bearish trade sentiment.

Rains are expected to be rather widespread this next week across the US Corn Belt to NOAA’s 7-day forecast, with much of the region seeing 1 to 3 inches.

US wheat markets are narrowly mixed this morning…winter wheats are down 1 to 2 cents, while spring wheat futures are up a penny. The US wheat complex finished mixed across the three markets on Tuesday…spring wheat closing 2 to 3 cents lower.

Minnie Sept spring wheat futures are up 1 cent at $6.02/bu this morning, holding above psychological chart support at $6.00 following a 50 cent plunge to start this month. The spring wheat market is trading at its lowest level since mid-May and far below all its key moving averages.

Winter wheats are struggling to gain upward momentum in the face of ongoing harvest across the northern hemisphere.

The US announced a preliminary trade deal with Indonesia on Tuesday, reportedly including commitments to purchase $4.5 billion in ag products…though no details.

CANADIAN GRAIN MARKET

ICE canola futures moved higher on Tuesday, taking some support from gains in Chicago soyoil. European rapeseed was also higher on the day, although losses in soybeans, Malaysian palm oil and crude oil limited canola’s advances.

Prairie weather was largely unchanged from a day earlier, with rain continuing to fall from southwestern Alberta into southwestern Saskatchewan. However, the remainder of Western Canada is expected to be mostly dry for the rest of this week.

November canola futures advanced $8.20 to close at $690.80/tonne, and January climbed $8 to $698.90.

For today… canola futures are giving back a good portion of Tuesday’s gains this morning…currently trading $4/tonne lower. Benchmark Nov canola is $4.80 lower at $686.00/tonne. While technically oversold on a short-term basis, no clear sign of sustained upward price momentum in the cards at this time. The upward trendline drawn from the March low remains broken. First line of overhead resistance is the 50-day moving average ($696), while first line support is around the $670 level (early June low).

Soyoil is being watched closely for a canola market bellwether. Bean oil continues to edge up slightly this week on follow through from Friday’s bullish USDA report.

US soy crush data out yesterday (story above) was bullish of bean oil, with futures staying above its 20-day moving average, while the bullish breakaway gap (June 16) left on the daily and weekly continuation charts remains well below current prices.

Uncertainty over the benefits of recent relief for much of Saskatchewan and Alberta given the stage of development, with most of Manitoba still also needing rain has left weather influence a toss-up.

In related markets…a mildly bullish tone across the CBOT soy complex and Malaysian palm oil futures this morning. But EU rapeseed futures are down slightly.

To access the latest futures prices, go to https://www.producer.com/markets-futures-prices/