GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS
OVERNIGHT GRAIN TRADE
Grain markets are in the green to start this morning. ICE canola futures are trading mostly $2 to $4/tonne higher this morning…bouncing with world vegoils and energy markets.
CBOT corn futures are up 2 cents/bu this morning. Corn futures dropped yesterday news of a two-week ceasefire between the US and Iran.
Chicago soybean futures are posting morning gains of 4 to 5 cents, with both soymeal and bean oil slightly higher. Soybean prices, dragged down on Wednesday by weakness in soyoil and a crashing crude oil market due to the ceasefire, still managed to move higher yesterday.
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US wheat markets are also higher after yesterday s draw down…Minnie spring wheat futures are gaining 6 to 8 cents, HRW up 9 cents and SRW wheat 3 to 8 cents higher.
Traders await today s monthly USDA supply/demand report (11 am CT release). The agency is expected to show only small changes in its estimates of US corn, soybean and wheat carryout for the current marketing year from their March report. However, US corn stocks are still expected to be significantly higher than a year ago. US wheat and soybean stocks are seen modestly above levels seen at the same time last year.
Meantime, traders expect the agency to estimate Brazil and Argentina corn and soybean production levels to be very close to what it estimated in the March report.
Macro Thoughts
Global cereal production remained near record levels in this past year, and stocks-to-use ratios have held relatively steady. Supply conditions are not as tight as during the last major disruption (2020-22), and recent price volatility has tended to reflect short-term reactions to external developments rather than a broad shift in ag supply/demand balances.
Even so, markets are not immune to outside influences. Wheat prices in recent weeks have reacted to drought across parts of the western US Plains and ongoing uncertainty surrounding Black Sea exports. Energy markets have also re-emerged as a factor, with higher crude values lifting fuel, freight and input costs…even accounting for yesterday s sell-off.
That influence is showing up more directly in day-to-day trade. Higher fuel costs have made forward pricing in grain markets more difficult, particularly on longer-haul business. In some cases, sellers are absorbing those increases on existing contracts and adjusting pricing on new business. Market participants are building in a wider range of outcomes when quoting freight-dependent business.
Trade policy is also a persistent, if less visible, part of that backdrop. Tariffs introduced over the past year continue to work through the system, contributing to a more cautious approach to forward business.
As a result, buyers across grain markets have tended to secure coverage in smaller increments, with activity tied more closely to short-term price movement. So far, geopolitical influences have been sharp but relatively short-lived, reinforcing the view that current price volatility is more episodic than structural.
Today s grain market differs from 2022 in one key respect: Volatility is not being driven by widespread supply shortages. Instead, price movement appears to be shaped by stable production levels and increased sensitivity to energy markets, trade policy and conflict in the Middle East. Interest rates are also holding at more neutral levels, limiting the kind of broad-based stress seen during the early 2020s.
While price volatility has returned, past cycles suggest these periods of disruption are often short-lived and not always indicative of a broader shift in fundamentals.
Meanwhile, the World Bank, International Monetary Fund and the UN World Food Program warned on Wednesday that sharp increases in oil, natural gas and fertilizer prices triggered by the war in the Middle East will inevitably cause rising food prices and food insecurity. In a joint statement issued after a meeting on the war, the leaders of the global institutions said the burden would fall most heavily on the world s most vulnerable populations, particularly in low-income, import-dependent economies.
In Other News
– Waiting in Hormuz… At the Pentagon s first press briefing since US President Donald Trump declared a two-week ceasefire with Iran, Defence Secretary Pete Hegseth repeatedly referred to the major combat operation in the past tense, according to a Globe and Mail report. America s military achieved every single objective on plan, on schedule, exactly as laid out from day one, he said yesterday morning. Operation Epic Fury was a historic and overwhelming victory on the battlefield.
That sort of language might be a tad premature: Both sides offered competing accounts of the terms of the agreement, while Israeli Prime Minister Benjamin Netanyahu insisted the ceasefire deal did not include Lebanon. Israel then carried out its heaviest assault on the country since the start of the war, striking more than 100 targets in a 10-minute span and killing at least 254 people. Iran, which fired missiles and drones at several Gulf states yesterday, kept the Strait of Hormuz closed in response to Israel s attacks.
But even if Tehran can be persuaded to open the vital waterway…perhaps at the peace talks meant to begin tomorrow in Pakistan…it ll be a while before much oil flows through the Gulf region again with mistrust running high on both sides of the conflict. The US Energy Information Administration said it would take months after the war ends for normal output to resume, and that fuel prices will most likely continue to rise until then. Just as we had never before seen the strait close, we ve never seen it reopen, EIA administrator Tristan Abbey said. What exactly that looks like remains to be seen.
Roughly 20% of the world s oil is shipped through the Strait of Hormuz, and nearly all of that traffic came to a standstill once the US and Israel launched their war on Iran. According to the UN, some 2,000 ships…including oil and gas tankers, bulk carriers and cargo ships, along with six tourist cruise liners…have been trapped in the Persian Gulf since the end of February. Whenever the waterway does reopen, it ll be gridlock: Before the conflict, about 150 vessels passed through the narrow strait each day.
And note…75 critical energy infrastructures across the region have been attacked, more than a third of them severely. Repairs will take a long time…years in some cases…provided that officials feel it s safe for the work to begin.
Plus, it looks like we re in for another sticker shock: Iran said it will only allow ships to sail through the Strait of Hormuz if they cough up US$2-million each. Industry experts have taken to calling it the Tehran Toll Booth, and yesterday, Trump even absurdly floated the idea of getting in on the scheme. We re thinking of doing it as a joint venture, he told ABC News Jonathan Karl. It s a beautiful thing.
– Argentina exchange raises corn forecast to new record… Argentina’s 2025/26 corn harvest should reach a record 67 MMT, the Rosario grains exchange said, raising its estimate from a prior 62 MMT thanks to farmers planting more fields with the crop than originally expected. The corn forecast would far exceed the previous record of 52.5 MMT set in the 2023/24 season, according to data from the exchange. Argentina is the world s third-largest exporter of the grain.
While acres planted to soybeans were reduced this growing season, the exchange maintained its harvest estimate for soybeans at 48 MMT due to expected higher yields than previously forecast. Argentina is the world s largest exporter of soybean oil and meal.
– Super El Ni o event coming?... A meteorologist with WeatherDesk says conditions are expected to be mostly favorable across the US Midwest for the remainder of 2026. Kyle Tapley says parts of the Eastern Corn Belt have benefited from recent wet weather. That s taking care of some of the dryness that developed in the winter months across the Midwest, but it s still dry across the Delta particularly across the west central plains and in areas like western Kansas and Nebraska, he says.
He says current weather models are predicting a strong El Ni o event to develop in July and August. Typically, there is a correlation with some cooler and wetter conditions across the Corn Belt during that time period, he says. We are expecting near normal weather for summer in the US, but there are some cooler and wetter risks. The area of concern would be the far northern US Plains and the Canadian Prairies where we could see some dryness.
Tapley says El Ni o is expected to peak in November and will likely continue into early 2027.
Outside Markets
The Dow Jones Industrial Average charged 1,325.46 points higher on Wednesday to settle at 47,909.92, while the S&P 500 jumped 165.96 points higher to 6,782.81. Canada S&P/TSX stock index rallied 383 points to 33,620.
Early Thursday, the June Dow Jones Futures are down 172 points. European and Asian stock markets are also lower. TSX futures have followed sentiment lower this morning.
Global markets this morning are taking took back some of yesterday s relief rally as cracks quickly began to appear in the fragile Persian Gulf truce, pushing oil prices back up and reminding investors the inflationary fallout would last a long while yet.
The June US Dollar Index is down 0.215 at 98.710. The Canadian dollar strengthened against its US counterpart…currently quoted at 72.30 US cents.
May crude oil futures are up $5.52 at US $99.93/barrel. Oil prices are up this morning to test $100/barrel as doubts over a fragile two week Middle East ceasefire raised concerns that energy flows through the crucial Strait of Hormuz will remain restricted.
The chances of a meaningful [strait] reopening any time soon look dim, said Vandana Hari, founder of oil market analysis provider Vanda Insights, predicting continued volatility in oil prices.
Grain Markets
Chicago soybean futures are trading 4 to 5 cents/bu higher this morning. Bean futures closed Wednesday s session with contracts steady to 3 cents in the green, getting support from meal. Soymeal futures are up $1/ton or less than this morning after rising $2 to $5/ton yesterday. Soyoil futures are up 26 to 61 points right now after tumbling 150 to 230 points lower on Wednesday.
Crude oil was down $16/barrel yesterday following the announcement of a 2-week ceasefire between Iran and the US. But it s back up $5 this morning as cracks in the ceasefire are already showing.
USDA will release its updated monthly supply/demand report this morning (11 am CT). A survey of analysts by Bloomberg shows very few changes expected to the US balance sheet with an average estimate at 349 million bu for US soybean carryout in 2025-26 vs 350 million bu projected in March. Analysts look for world stocks to be up 0.2 MMT to 125.5 MMT.
Brazil s soybean harvest is nearing completion, with record harvest all but confirmed, while early harvest activity is ongoing in Argentina.
Stateside, the trade is monitoring any potential adjustments to planted area. One of the big questions right now is export demand for US beans from China, with high-level face-to-face negotiations not expected for more than a month.
Chicago corn futures are up 2 cents this morning. The corn market saw some buying off the early overnight lows yesterday, but still managed to close with losses of 1 to 3 cents with plunging crude oil the pressure point. But oil is back up this morning.
EIA data from Wednesday showed US ethanol production averaging 1.116 million barrels per day for the week ended April 3. That was a 41,000 bpd increase on the week. Stocks saw a 62,000 barrel increase, to 26.053 million barrels.
Ahead of today s USDA supply/demand report, analysts surveyed by Bloomberg are looking for a slight increase (3 million bu) from March to 2.13 billion bu for the US carryout projection. World ending stocks are seen 0.4 MMT higher to 293.2 MMT.
For Argentina, corn harvest conditions look mostly good with a record crop on the way. For Brazil, some of the second crop corn could use rainfall, with CONAB s next look at Brazil s crops out on the 13th.
In the US, while there are some concerns about planting conditions in parts of the Corn Belt, it is early.
US wheat markets are higher this morning…spring wheat futures up 6 to 8 cents, HRW gaining 9 cents and SRW wheat rising 3 to 8 cents. The US wheat complex was under pressure on Wednesday as money came flowing out with pressure from crude oil…spring wheat saw losses of 11 to 17 cents in the front months at the close.
Analysts are looking for USDA to trim its projection of US wheat ending stocks estimate by 8 million bu to 923 million in its supply/demand report today. World stocks are expected to be up 0.4 MMT to 277.4 MMT.
Medium-term forecasts have improved rain chances for parts of the US Plains, which, if realized, would benefit the hard red winter crop. In contrast, US soft red winter conditions generally look good. Wheat is also watching spring wheat planting conditions in the US and Canada, in addition to Australia, and post-emergence development in Europe, Russia, and Ukraine.
CANADIAN GRAIN MARKET
ICE canola futures posted double-digit losses on Wednesday, pressured by a sharp selloff in global energy markets and weakness in Chicago soyoil futures.
Crude oil prices tumbled following news of a 2-week ceasefire between the United States and Iran. The drop in energy values weighed heavily on vegetable oil markets, including canola, given its strong linkage to renewable diesel demand. Additional pressure came from declines in Chicago soyoil, although soybeans did manage to rebound from earlier declines to finish slightly higher on the day. Malaysian palm oil also gained, but European rapeseed was mainly lower.
May canola fell $14.50 on Wednesday to close at $704.90/tonne, while November lost $12.80 to $714.80.
For today… canola futures are showing some bounce back this morning, trading up mostly $2 to $4tonne. Nearby May canola futures are leading this morning with a gaining of $4.60 at $709.50/tonne. There is a still a technical concern on the price chart that yesterday s sell down was the trigger to a downside breakout of a multi-week sideways coiling pattern. But that has yet to be confirmed. May canola is trading below its 20-day moving average ($723) but so far has not violated its 50-day average ($702). That said, trendline support for the rally established from the December low has been violated.
The canola market is drawing support this morning from CBOT soy complex gains, more notably in soyoil. A bounce in energy markets is leading the way green in the ag markets overall this morning. That s coming from a rising degree of skepticism taking over market sentiment regarding the fragile US-Iran ceasefire ahead of talks Friday. Shouldn t be a surprise…can anyone trust either erratic US or fanatical leadership in Iran to keep the peace? Given the unrealistic nature of the ceasefire with it looking likely to fail, bargain hunting seems to be supporting canola over the $700 level.
Geopolitical headline news will continue to direct price direction across commodity and financial markets.
That said…seasonal price trends for canola at this time of year generally point higher.
Canadian old crop canola supplies remain more than sufficient to meet near-term demand. However, the prospect of reduced fertilizer applications due to high costs could be price supportive in the longer term if yield potential is diminished.
With the bearish technical signals on one side and supportive seasonals on the other, perhaps the market will just trade the war for now.
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