AM Market Report – July 17, 2025 | The Western Producer

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are showing some recovery rebound potential this morning following Wednesday’s sell down…currently trading $9 to $10/tonne higher.

Chicago soybean and corn futures are slightly weaker this morning. Soybeans are now mostly steady to fractionally lower. Beans posted a strong upward reversal on Wednesday on hopes for US export demand. Perhaps for now at least, traders feel the bearish warning flags of the early summer thus far have been fairly priced in and are seeing the need to reduce short side risk exposure amid what remains respectable demand for US grains and oilseeds.

Chicago corn futures are now mixed to a penny lower.

But the price outlook on US row crop gains is being impeded by generally non-threatening US weather, and expectations for large US harvests have pressured prices of both crops recently. The USDA said on Monday that US corn and soybean crop ratings were the highest for mid-July since 2016.

US wheat markets continue weaken…winter wheat futures are 2 to 5 cents lower and spring wheat is down around a penny. The wheats have been unable to join corn/soybeans in any rally, as traders are in wait-and-see mode during worldwide winter wheat harvests.

In Other News

– Much needed but uneven rainfall for Manitoba… Isolated thunderstorms brought much needed but uneven rainfall across Manitoba this past week, with precipitation amounts ranging from 0 mm to 38.8 mm, according to the latest provincial crop report on Tuesday. Some areas were hit by intense storms, including hail events. The East, Central, and western parts of the Southwest regions saw the most significant rainfall over the past week.

Despite the recent showers, much of Manitoba remains dry. Large swaths of the East, Northwest, and Interlake regions have received less than 50% of normal precipitation for the season. Even in the wetter Southwest and Central regions, total precipitation remains below 70% of the 30-year seasonal average since May 1, with only a few pockets surpassing the 80% mark.

Crop development is mixed across the province. Corn ranges from V8 growth to tasseling. Spring cereals…wheat, barley, and oats…are generally in the heading to grain fill stages. Fusarium Head Blight (FHB) fungicide treatments are nearly complete. Spring wheat quality is largely good, though 10% of fields are rated fair.

Canola crops are at a wide range of growth stages due to a long seeding window. Late seeded canola is at cabbage to early bolting. Earliest seeded canola is fully podded. Some late-seeded fields are just beginning to bolt, while early seeded ones are now fully podded. Flax is flowering, with early-seeded fields already forming bolls. Sunflowers have progressed to the R1 to R3 stages. Fungicide applications continue, particularly in canola fields damaged by hail.

Regionally, the Southwest experienced another hot, dry week, adding stress to crops. Rain later in the week offered some relief. In the Northwest, high temperatures helped accelerate crop development but exacerbated dryness, particularly in lighter soils now showing moisture stress. Meanwhile, farmers in the East continue to hope for more consistent rainfall to support crop maturity.

– Ukrainian parliament adopts oilseed export duties… Ukraine’s parliament passed a bill imposing 10% export duty on rapeseed and soybeans, a measure which would hurt small farmers and producers. Ukraine is a major European grower and exporter of oilseeds, sending abroad most of its rapeseed crop and around a half of its soybean output. Those exports are currently not taxed. Oleksiy Honcharenko, one of the lawmakers, protested the measure, calling it “robbery of farmers”.

– Russian grain crop forecast raised… Russian agricultural consultancy SovEcon said on Wednesday that it had revised its total grain crop forecast for 2025 to 130.5 MMT, up from 129.5 MMT. Russia’s wheat crop forecast has been raised to 83.6 MMT from the previously expected 83.0 MMT, SovEcon said.

– Exchange adjusts Argentine soybean, wheat production forecasts… The Rosario Grain Exchange raised its 2024-25 soybean production estimate 1 MMT to 49.5 MMT, while maintaining its corn crop estimate at 48.5 MMT. The exchanged lowered its projected 2025-26 production forecast by 700,000 tonnes to 20 MMT amid a 200,000-hectare cut to planted area.

– US ethanol production rises slightly on week... US ethanol production saw a modest week-to-week bump. The US Energy Information Administration says production averaged 1.087 million barrels per day, up 2,000 on the week, but down 19,000 on the year. The USDA expects 5.5 billion bushels of corn to be used for US ethanol production this marketing year.

The US Renewable Fuels Association says stocks hit a more than six month low at 23.635 million barrels, falling 324,000 from the previous week, but rising 475,000 from a year ago.

– Canada-Mexico plan stronger trade relations after US tariffs… Mexican President Claudia Sheinbaum spoke with Canadian Prime Minister Mark Carney and the two agreed to strengthen trade collaboration amid the US tariffs set to go in effect next month. Sheinbaum said she and Carney discussed strategies both countries were taking to negotiate with the Trump administration ahead of the Aug. 1 tariff deadline.

– Canada announces steel tariffs… Prime Minister Mark Carney on Wednesday said Canada will introduce a tariff rate quota for countries with which it has free trade agreements, excluding the United States, to protect the domestic steel industry. A 50% tariff will apply to imports from these countries that surpass the 2024 volumes, though Canada will honor existing arrangements with its Canada-US-Mexico Agreement trade partners, Carney said. Canada will implement additional tariffs of 25% on steel imports from all countries containing steel melted and poured in China before the end of July.

For countries without free trade agreements with Canada, the government lowered the tariff-free quota to 50% of 2024 volumes from 100% previously. Above the quota, imports will also face a 50% tariff.

Carney is responding to complaints from the domestic industry, which had said that other countries are diverting steel to Canada and making the domestic industry uncompetitive due to US tariffs. The Canadian steel industry had asked the government to introduce tougher anti-dumping measures to protect the domestic industry. US President Donald Trump increased import duties on steel and aluminum to 50% from 25% earlier this month. Canada is the top seller of steel to the United States.

Carney also said domestic steel companies would be prioritized in government procurement, and he introduced a $1 billion fund to help steel companies advance projects in industries such as defense.

Outside Markets

The Dow Jones Industrial Average rose 231.49 points higher on Wednesday to settle at 44,254.78, while the S&P 500 Index gained 19.94 points to 6,263.70…both recovered from a slide after initial reports that US President Donald Trump was planning likely to fire US Federal Reserve chief Jerome Powell soon. Early Thursday, September Dow Jones futures are up 130 points.

US stock index futures are higher this morning. Investors cautiously look to assess earnings from heavyweight technology companies and as anxiety lingered over the uncertain tenure of US Fed chief Powell.

Trump denied he was planning to fire Powell, but admits he has talked about it with congressional leadership. At this point, a US interest rate cut in the late July Fed meeting seems quote unlikely, which may lead to heightened tensions between the Trump and Powell.

TSX stock futures are little changed to higher this morning after Canada’s main stock market closed up yesterday.

“I think the most likely outcome is for Powell to stay on until the end of his term next year. Having said that, this is not the first time, so there are going to be episodes of volatility in the (US) dollar as a result of political noise,” said Carlos Casanova, UBP’s senior economist for Asia.

The September US Dollar Index is up 0.380 at 98.455. The Canadian dollar weakened against its US counterpart…currently quoted at 72.76 US cents.

August crude oil is up $0.18 at US $66.56/barrel. Oil prices edged up on signs of easing trade tensions, stronger than expected economic data from the world’s top oil consumers and renewed risks in the Middle East.

“Oil thinking has been distracted from the Middle East, and the reminders of Israel’s attacks into Syria and the drone attacks on oil infrastructure in Kurdistan are timely and once again add a little fizz to proceedings,” said John Evans, analyst at PVM Oil Associates.

Grain Markets

Chicago soybean futures are trading mostly steady to fractionally lower this morning. Bean futures were in rally mode on Wednesday, with chart support at the $10.00/bu area holding. Contracts were up 18 to 19 cents at yesterday’s close. Soymeal futures are down $1/ton this morning. Soyoil futures are 19 to 38 points higher this morning (5th straight higher session) after gaining 20 to 24 points on Wednesday, supported by biofuels demand expectations.

Helping lift bean futures yesterday was USDA reporting an US export sale for 2025/26 marketing year under the daily reporting system. Private exporters reported 120,000 tonnes of US soybeans sold to “unknown” destinations…with some speculation it finally could be China doing some business (unconfirmed). But the likelihood of it being Beijing seems questionable due to Brazil’s hold over that key export market amid US-China tariff tensions.

Meanwhile this morning, USDA reported 271,900 tonnes of US soybeans were sold for export in the week ended July 10, coming in within the range of trade expectations, albeit more to the lower end. New crop export sales were reported at 529,600 tonnes for the same week…make the 400,000-900,000 tonne range of trade ideas.

Near-term US soy crop development remains mostly favorable, but there are some questions about longer-term forecasts, which could emerge once beans are in critical stages of development in August.

Chicago corn futures are trading steady to a penny lower this morning. Dec corn is down 0.75 of a cent this morning at $4.23/bu, pausing after three straight days of gains coming off its contract low. But overhead chart resistance is being encountered at its 20-day moving average ($4.25). The corn market finished 4 to 5 cents higher yesterday.

Reports of pollination issues in the eastern US Corn Belt may have played a role in the rally through the week, but unfortunately for corn bulls substantiating those claims may prove difficult in the short-term. Bulls may find sustaining the rally difficult in the face of solid USDA crop ratings and a wet forecast through July.

USDA this morning reported only a very modest 97,600 tonnes of US corn were sold for export in the week ended July 10, falling well short of trade expectations which ranged from 0.5 to 1.2 MMT. New crop sales came in at 565,900 tonnes…within trade ideas.

Average daily US ethanol production was reported at 1.087 million barrels per day during the week ended July 11, up 2,000 bpd the previous week. Ethanol stocks were down 324,000 barrels to 23.635 million barrels.

US wheat markets continue to soften… Minnie spring wheat futures are down a penny…fifth straight losing session of a stiff sell-off to test near their May lows now. HRW wheat is down 2 cents this morning, while SRW is off 3 to 5 cents. US wheats posted mixed trade on Wednesday, with most hard red contracts lower and soft red heading higher. Spring wheat futures were down 1 to 2 cents on Wednesday.

Minnie Sept spring wheat futures are down 0.5 cent this morning at $5.99/bu…flirting with/struggling to hold chart support at the $6.00/bu level.

USDA this morning reported 494,400 tonnes of US wheat were sold for export in the week ended July 10, respectfully coming within trade expectations 300,000 to 700,000 tonnes.

For winter wheat futures, rally attempts through the week thus far have been quick to die out as traders await more accurate calibration of the Northern Hemisphere harvest…notably US, Europe and Black Sea.

SovEcon now has Russia’s wheat crop projected at 83.6 MMT, an increase of 600,000 tonnes from the previous guess, but added the harvest pace is slower than average and yields in some areas have been less than ideal. Ukraine’s Ag Ministry says harvest conditions are mostly favorable. France’s Ag Ministry says 36% of soft wheat in that country has been harvested, with 68% of the crop rated good to excellent.

CANADIAN GRAIN MARKET

ICE canola futures fell Wednesday on the news there may be more competition for Canadian canola into China. Reports suggest that China and Australia are close to a deal that would see China import five test cargoes of canola from Australia. China has been closed to Australia canola since 2020 due to politically-motivated disease concerns, but the possible resumption of Aussie shipments could dent demand for Canadian product.

In March, China announced a 100% tariff on imports of Canadian canola oil and meal, but not seed. However, Canadian exports of canola seed to China remain the subject of a politically-motivated Chinese anti-dumping investigation.

Losses in European rapeseed and Malaysian palm oil added to the downside in canola, but the Chicago soy complex was higher.

November canola dropped $14.80 to $676/tonne, and January was down $14 at $684.90.

For today… canola future are rallying $9 to $10/tonne higher this morning, recovering a good portion of yesterday’s surprisingly steep declines. Nov canola is up $10.20 right now at $686.20/tonne, showing some consolidation in recent days, but still a notable dump lower since posting its contract high close almost a month ago ($744).

Traders this morning might be getting over yesterday’s bearish talk that China may soon reopen its doors to Aussie canola. But if that happens…and even if volumes are notable, which is a debateable…that merely shifts the demand matrix. The Australians have been important canola suppliers to the European market in recent years. They don’t have more canola to ship, so any shift to more China demand simply opens the door for others (Canada?) to feed into the EU market. But that said, Canadian canola export shipping is more geared to West Coast movement.

The sentiment regarding 2025 Canadian canola condition…pretty good shape across much of the northern half of the Prairies. A half inch to an inch of rain right now would certainly be welcome for crop in southern Manitoba. But in west-central and central Saskatchewan, it’s not great.

Our colleague Bruce Burnett came to the same conclusion based on his weekend crop tour of the Prairies. He estimated the average yield of Western Canada’s canola crop at 38.6 bu/acre based on current overall crop conditions…subject yet to change obviously.

“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,” he said to the Western Producer. In areas such as parts of southern Alberta, Burnett said canola yields could reap only 20 bu/acre, maybe as little as 15.

Overall, he pegged the canola harvest to bring just under 18.6 MMT, about 550,000 less than in 2024.

Weather Update
By Bruce Burnett

I’m spending this week at Ag in Motion (AIM) in Langham, SK and one of the key points in my presentation is that weather conditions will be favorable for the filling stage of the grain, pulse and oilseed crops. The long term weather outlook released by the US NWS is calling for normal temperatures and above normal chances of rainfall. The map below shows the precipitation chances for the last week of the month. Above normal precipitation is forecast on both sides of the border. Remember that we received “blast furnace” conditions during the second half of July and August last year. The forecast for this summer is very good news for preserving current crop yield potential across Western Canada.