AM Market Report – August 11, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are rebounding $6 to $7/tonne higher to start this morning…a bounce from recent weakening price action…but now coming well off the overnight highs. Chicago soy complex gains overnight are helping lift canola futures. Soybean futures are charging generally 12 to 17 cents/bu higher this morning, with soyoil up near 80 points. Soy is up on overnight social media rants from US President Donald Trump urging China to buy more US soybeans. Seems to me weak reasoning to rally…more below in a separate story.

Chicago corn futures are up 1 to 2 cents this morning.

US wheat markets are higher this morning. Minnie spring wheat futures are 2 to 5 cents higher. Wheat futures last week fell to fresh lows before seeing a modest bounce later in the week.

US corn, soybean, and wheat futures markets fell Friday and ended the week lower. Traders concluded the week by fading the upcoming USDA supply/demand report (Aug 12). Analysts expect big US corn yields and higher US ending stocks for corn and soybeans, according to pre-report estimates. The bearish pre-report thoughts, combined with nearly ideal US crop weather so far in August, make sustained price rallies hard to support.

USDA supply/demand report… Tuesday is arguably the big data point of the month for US grain markets: USDA’s monthly supply/demand report (11 am CT release). Huge and even record yields could be forecast for the US corn and soybean crops.

A Dow Jones Newswires survey of grain analysts shows they expect US corn production this year at 15.991 billion bu, with a national average yield of 184.3 bu/acre. The record for US corn production is the 15.186 billion bu crop grown in 2024, with a record average yield of 183.6 bu/acre.

The Dow Jones Newswires survey expects US soybean production in 2025 at 4.371 billion bu and an average yield of 53.0 bu/acre. US soybean production in 2024 totaled 4.37 billion bu, which was also a record. The average yield per acre was 50.7 bu.

In Other News

– Rain relief for Prairie areas… Recent wet weather have brightened prospects for some crops across Western Canada, but the rainfall’s uneven spread has left conditions ranging from soggy to still parched. According to a report from World Weather, much of the crop belt benefited from rain over the past seven days ended Friday. Some areas saw totals near 4 inches, while unofficial reports in parts of western, central, and southern Saskatchewan exceeded 5 inches.

The moisture was welcome, but still not enough or too late in some cases, particularly in northeastern Saskatchewan and central to northern Manitoba, where persistent dryness this growing season has left some crops withered or prematurely matured. While drought recovery has been slowly advancing in western and far southern parts of the Prairies, the improvements are far from uniform…and in some areas, the rain has tipped the balance toward excess. In general, the southern portion of the Prairies has done better this year in terms of rainfall, compared to the more northern areas. Manitoba’s Interlake region has been especially dry.

The active weather pattern is set to continue, World Weather said. Forecasters say the added precipitation should help replenish soil moisture in many locations, though localized flooding risks remain in wetter zones.

– US-Russia summit set for Friday in Alaska… US President Donald Trump said he will meet with Russian President Vladimir Putin on Friday (Aug 15) in Alaska to discuss ending the war in Ukraine, a potential breakthrough after weeks of expressing frustration that more was not being done to quell the fighting. Such a summit may prove pivotal in a war that began more than three years ago when Russia invaded its western neighbour and has led to tens of thousands of deaths…although there’s no guarantee it will stop the fighting since Moscow and Kyiv remain far apart on their conditions for peace.

Trump almost two weeks ago moved up his ultimatum to impose additional sanctions on Russia and introduce secondary tariffs targeting countries that buy Russian oil if the Kremlin did not move toward a settlement. The deadline was Friday (Aug 8). But the White House did not answer questions that evening about the state of possible sanctions after Trump’s announcement of an upcoming meeting with Putin.

Meanwhile, European allies want Ukraine’s involvement in Trump-Putin peace talks. European countries have rallied behind Ukraine, saying there can’t be peace without Kyiv’s involvement in talks, ahead of an upcoming meeting between Trump and Putin.

– Trump tells China to buy more US soybeans... US President Trump said in a social media post on Sunday he hopes China will dramatically increase its purchases of US soybeans. “China is worried about its shortage of soybeans,” Trump wrote on the Truth Social platform. “I hope China will quickly quadruple its soybean orders. This is also a way of substantially reducing China’s trade deficit with the USA.” Trump’s comments rallied soybean futures overnight and spurred fresh optimism that a trade deal between China and the US could soon be completed. China faces an Aug. 12 deadline before its tariff truce with the US expires. However, the Trump administration has suggested that deadline is likely to be extended.

While CBOT soybean futures are rallying this morning, Trump’s call is more fluff than substance. It seems highly unlikely that China would ever buy four times its usual volume of soybeans from the US. The country has steadily reduced its reliance on US soybeans in recent years, shifting more purchases to South America. And new crop US soy sales to China for the upcoming 2025-26 marketing year are non-existent, worrying traders that China may be prepared to forego US soybeans altogether this year given abundant supply from Brazil and Argentina.

US traders should pump the brakes on Trump’s ability to deliver on his taunts.

– US increases duties on Canadian softwood lumber… The United States has increased countervailing duties on Canadian softwood lumber, bringing the total to 35.19%. The decision was announced on Friday by the US Department of Commerce. Although the escalating fees were anticipated, they still drew swift condemnation and words of alarm from industry and political leaders in B.C. and Ontario, who say it is yet the latest example of unfair treatment of the industry from their largest and most important international partner.

“Two words describe Donald Trump’s latest move to increase countervailing duties on Canadian softwood lumber: absurd and reckless,” B.C.’s Forests Minister Ravi Parmar said in a statement posted to social media. “Adding these additional softwood duties…will only worsen an affordability crisis on both sides of the border.” He said it’s an attack on hard-working forestry workers in Canada…and the real people paying for tariffs are US consumers looking to build homes.

Canada has consistently contested US duties under the Canada-United States-Mexico Agreement (CUSMA), North American Free Trade Agreement and at the United States Court of International Trade. “We’ve won every single time,” Parmar added. “The challenge we have this time around is this is a president who doesn’t believe in the rule of law.”

– Higher Russia wheat crop forecast… Russia’s IKAR consultancy said on Friday it had raised its 2025 wheat crop forecast to 84.5 MMT from 84.0 MMT previously, and its wheat export forecast by 0.5 MMT to 41.5 MMT in the new marketing season. “We increased mainly due to very decent yields in the central and the Volga region, which fully correspond to our estimates made on the ground,” IKAR’s head Dmitry Rylko told Reuters.

Some key grain producing Russian regions in the south were hit by drought this year, but a fall in their output was offset by better yields elsewhere.
“In addition, we are seeing higher yields of spring wheat than expected. We see average-to-good prospects for the harvest in Western Siberia and good ones in the Urals,” Rylko added.

Russia’s official wheat crop forecast stands at 89-90 MMT. This estimate includes wheat from Russian-controlled areas of Ukraine. IKAR does not include crops from these areas in its estimates.

– France lifts wheat crop estimate… France’s farm ministry on Friday increased its estimate of this year’s French soft wheat harvest, confirming a sharp rebound from last year, but forecast a smaller corn crop as hot, dry weather was seen affecting yields. For soft wheat, France’s main cereal crop, the ministry pegged output at 33.1 MMT, up from its initial outlook last month of 32.6 MMT. That put expected production 29% above the rain-hit 2024 volume, which was the lowest since the 1980s, and 4% above the average of the past five years. Wheat harvesting, which is winding down, had shown good yields, despite some stress from heat and drought, the ministry said.

The ministry also raised its output projections for barley to 12.0 MMT from 11.8 MMT last month, and rapeseed to 4.5 MMT from 4.2 MMT. The forecasts were similarly above 2024 levels and the five-year averages.

In contrast, the ministry’s first projection of this year’s corn crop anticipated output would fall 5.6% compared with last year to 13.9 MMT. An expected decline in overall yield, reflecting mixed field conditions as crops have faced drought and high temperatures, was expected to outweigh increased planting this year.

– Fertilizer sticker shock… The US National Corn Growers Association’s Krista Swanson says it would take about 226 bu of corn to buy a ton of ammonium phosphate, which is up from the 180 bu it took at the beginning of this year. As fertilizer costs are on the rise, corn prices are now at or below $4/bu, and it’s creating a grim outlook for 2026.

Farmers are calling input suppliers to get quotes for fall fertilizer, and the prices are shocking. The corn price to fertilizer price ratio on inputs such as phosphate are now the highest on record, and as corn prices continue to slide, it’s creating a financial hurt on farmers.

Swanson says it’s a combination of factors fueling the higher fertilizer prices, including geopolitical tensions, as well as the uncertainty surrounding the US tariff war with the world. To sum it up, she says it’s:

– Lingering supply chain disruptions
– Potential input tariffs on fertilizer imports
– Geopolitical relations
– Ongoing countervailing duties (CVDs) on imports of phosphate fertilizers from Morocco into the US.

– Canada losing jobs in July… The Canadian economy shed some 41,000 jobs in July as young workers and the private sector bore the brunt of the losses, Statistics Canada said Friday. The unemployment rate held steady at 6.9% as the number of job seekers was roughly unchanged from June. The economy lost 51,000 full-time positions in July, and StatCan said the bulk of the losses were in the private sector. July’s drop in jobs partially offsets an unexpected gain of 83,000 positions in June. Economists had expected a slight job gain ahead of Friday’s release.

Average hourly wages meanwhile rose 3.3% on an annual basis in July, up a tick from June.

The Bank of Canada will be gauging the strength of the labour market as it prepares for its next interest rate decision on Sept. 17. The central bank left its policy rate unchanged at 2.75% in its decision last week.

Outside Markets

The Dow Jones Industrial Average gained 206.97 on Friday to settle at 44,175.61, while the S&P 500 rose 49.45 points to 6,389.45. Early Monday, the September Dow Jones Futures are up 93 points.

US stock index futures are higher this morning, European stocks mixed, while Asian markets were higher overnight. Traders are still struggling for direction but leaning higher, with the focus of the week on a crucial US inflation report that could influence the Federal Reserve Board’s course on US interest rates.

TSX futures are inching up this morning after Canada’s main stock market closed slightly lower on Friday, but still posted a hefty weekly gain.

Both US headline and core CPI (inflation) are expected to have risen in July; core inflation remains sticky near the 3-per-cent level…above the Fed’s 2% policy target…which in normal times should justify a no cut from the Fed next month. But these are not normal times, and the increasing pressure from the White House…distorting economic data and also installing Trump-friendly officials…suggests that rate cuts will come, no matter what.

The September US Dollar Index is up 0.301 at 98.310. The Canadian dollar weakened against its US counterpart…currently quoted at 72.68 US cents.

Sept crude oil futures are up $0.35 at US $64.23/barrel. Oil prices are edging higher this morning after falling more than 4% last week as investors awaited the outcome of talks between the US and Russia on the war in Ukraine. The talks follow increased US pressure on Russia, raising the prospect that penalties on Moscow could also be tightened if a peace deal is not reached.

But Russia has continued to play the Trump administration as Asian and European buyers find cheaper energy alternatives, undermining Trump’s push for more foreign countries to purchase US energy supplies.

The Trump administration did take a step toward punishing Moscow’s customers last week, imposing an additional 25% tariff on goods from India over its imports of Russian oil, marking the first financial penalty aimed at Russia in Trump’s second term. No order has been signed for China, the top Russian oil importer, but a White House official said on Wednesday secondary measures that Trump has threatened against countries buying the petroleum were expected.

But the crude oil market is betting Trump’s threats are hollow…betting that very little will actually happen.

Grain Markets

Chicago soybean futures are rallying 11 to 16 cents/bu higher this morning, though steadily pulling back from the higher posted overnight. Some market rationality is settling in after the initial spark higher overnight triggered by a late Sunday post from Donald Trump, which really means nothing, but traders have initially interpreted as a signal of a looming US-China trade deal coming. It’s not.

China…the world’s largest soybean importer…still has not bought any new crop US soybeans, but other countries have US new crop soybean export sales at their fourth highest at this time of the marketing year. Mexico and Pakistan are the biggest buyers. The US-China trade dispute has a deadline of Aug. 12 to extend a trade truce on tariffs.

Bean futures posted losses of 5 to 7 cents across most contracts on Friday, as the Nov contract ended the week with a 1.75 cent loss.

Soybeans are the recent downside price leader ahead of tomorrow’s USDA August report. China needs to start its purchase program for US new crop soybeans (as it did last year), or the harvest pressure on CBOT soybean values will become more acute. There is no replacement for China as a US soybean buyer/importer at nearly 50% of US export demand annually. China has already covered its Sept/Oct soybean import needs from South America due to Brazil’s record large 2025 soy harvest.

Money managers added to their net-short position in CBOT soybean futures contracts to 65,930 as of Aug 5 from 36,111 the week before. This was the most bearish spec fund stance in seven months.

Soymeal futures are up $2 to $3/ton this morning on the same Trump fluff, with the Sept contract $5.70 higher last week…continuing a bounce off contract lows posted the end of July.

Soyoil futures are rallying 61 to 67 points higher this morning, but also pulling back from initially knee-jerk rally highs overnight. Bean oil recovering most of Friday’s losses which had the Sept contract falling 177 points last week to test key chart support.

Chicago corn futures are up 1 to 2 cents this morning…helped along by the soybean market rally. The corn market finished Friday down 1 to 2 cents. Sept corn was down 6.75 cents last week, with Dec slipping 5.25 cents.

Traders are looking for record large US corn average yield and overall production numbers from USDA’s supply/demand report on Tuesday (184 bu/acre yield and production around 16 billion bu. USDA is also expected to raise 2025-26 US corn ending stocks, with the average trade guess calling for just over 1.9 billion bu.

Corn futures are finding some price support on better than expected US export sales. But exporters question whether the US sales pace will continue as Trump tariffs bite and there is no evidence of China seeking US ag products.

US wheat markets mixed this morning… Minnie spring wheat futures are up 2 to 5 cents, HRW is steady to up a penny, while SRW wheat is 2 to 4 cents higher.

The 2025 US HRW harvest is three-quarters completed. The US spring wheat harvest in the Dakotas and Montana has commenced but has been slowed due to rain.

The global winter wheat harvest activity focus is largely on Europe, Russia and Ukraine. IKAR raised its guess for Russia’s wheat crop and exports a half million tonnes each, to 84.5 MMT and 41.5 MMT, respectively. Wheat also has an eye on conditions in Argentina and Australia, two major producers in the Southern Hemisphere.

Current Prairie cash spring wheat pricing leaves little to no room for profit for growers. Prairie cash prices vary by region, but are generally in the mid-$7/bu range. With current cash bids, you need solid yield because costs such as fertilizer, chemicals and land rent have not come down the way grain prices have.

Saskatchewan spring wheat farmers would need a price of $5.74 to $7.05 to cover their variable expenses this year, depending on which soil zone they are in, according to Saskatchewan Agriculture’s Crop Planning Guide 2025. They would need a price of $8.54 to $10.46 to cover their total expenses.

CANADIAN GRAIN MARKET

ICE canola futures resumed their losing ways to end last week. Canola closed lower on Friday…at least partially due to improving Prairie rainfall…helping improve the production outlook for some areas.

Losses in Chicago soybeans and soyoil contributed to closing week weakness in canola, as did weakening European rapeseed. Palm oil provided little direction, while crude oil was a bit lower.

November lost $7.90 on Friday to finish at $669.40/tonne, while January dropped $8.10 to $681.

For today… canola futures are rebound rallying mostly $7/tonne higher this morning, supported by an overnight Trump-inspired bounce in CBOT soy complex futures. But I have no faith in Trump calls for China to buy more soybeans…China will buy what it wants on its schedule. Trade euphoria on Trump tweets has calmed a bit now this morning…with soybean and canola futures backing off their overnight highs.

Noc canola futures are up $7.80 this morning at $677.20/tonne. The downtrend in place since the June 19 high ($744) remains in place, but Nov has found some technical support around the $670 level…100-day moving average at $673.

Tight cash canola supply is a supportive underlying market feature. Friday’s final Canadian Grain Commission weekly grain statistics report for the 2024-25 old crop marketing year showed a decrease in export shipments offset by very strong crush demands. Total canola export shipments for the year ended July 31 were reported as 9.519 MMT, up from last year’s 6.859 MMT. Total domestic use for the year ended at a record 11.524 MMT, up from last year’s 11.252 MMT.

Friday’s Commitments of Traders (COT) report confirmed spec fund money managers continued to take profits recently. They sold another 11,972 of contracts their net-long positions during the week ended Aug 5, taking them down to 84,666 contracts net long after marking a record high of 141,907 net long on June 23.

In related markets… Chicago soybeans and soyoil futures are up notably this morning on Trump tweets calling for China to buy US beans. But that’s all it is…talk. So futures are giving back a portion of their overnight gains now. Soyoil needs to hold chart key support in the 52 to 53 cents/lbs area which was tested last week.

European rapeseed futures are narrowly mixed to slightly higher this morning in a test of springtime lows.

Malaysian palm oil futures rallied sharply overnight, testing life-of-contract highs.

On the feed grains… While Chicago corn futures flirt with contract lows, feed barley and feed wheat prices in Western Canada are slipping to remain competitive. Shipments of US corn were recently priced at Cdn $275 to $280/tonne into Lethbridge, feed barley prices ranged from $265 to $275, while feed wheat was $260 to $270. Demand for feed grains is at a seasonal low.

Feedlots at this time of the year have less cattle around…lots of cow-calf pairs and yearlings out there on grass. Once they get placed in feedlots in October or November, we’ll see the cattle numbers come up a little later than normal this year. but at this time, deliveries into feedlots are slowly declining as there is less grain available and less cattle-on-feed.

Feed buyers are waiting for the start of grain harvesting for new crop supply. But demand from feedlots may take longer…perhaps late fall before picking up when feedlots at capacity with cattle, if they do get to capacity.

However, harvest timing, harvest quality, cattle feeders and export demand will determine feed grain prices over the next few weeks.

Delivered feed barley prices in Alberta ranged widely from $4.50 to $6.42/bu depending on region, down 22 cents from a month earlier. In Saskatchewan, prices ranged from $4.50 to $4.90/bu (down 61 cents) and in Manitoba, they were $4.50 to $4.92/bu.

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