AM Market Report – August 12, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are getting pounded lower…hard…this morning…down $38 to $44/tonne on devastating news overnight that China will levy a 75.8% import tax against imports of Canadian canola starting Thursday (Aug 14). More in our lead story in the news section below.

US grain markets are pulling back this morning ahead of today’s USDA supply/demand report. Chicago soybeans are 10 to 13 cents/bu this morning after rallying 20+ cents yesterday. Bean futures rallied to a two-week high on Monday after US President Donald Trump said he hoped China would quadruple its soybean buying from the United States (which has zero chance of happening)…and as forecasts of hot, dry US weather sparked some concern about soy yields.

Chicago corn futures are off 2 to 3 cents this morning.

US winter wheat futures are mostly 5 to 6 cents lower, while spring wheat futures are steady to a penny weaker. Wheat traders are watching a US-Russia Summit later this week, as the two countries seek to end the war in Ukraine.

Geopolitical news aside, grain markets have today’s USDA supply/demand report (11 am CT release) to think about. The question isn’t whether the report will print higher US corn and soybean yield and production numbers; instead, it’s a matter of how high. Huge, even record yields, could be forecast today for US corn and soybean crops.

A Reuters survey of analysts shows they expect, on average, US corn crop production this year to total 15.99 billion bu, with an average yield of 184.411 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. For soybeans, the poll of analysts expects, on average, the US soybean crop production this year to be 4.368 billion bu, with an average yield of 52.937 bu/acre. US soybean production in 2024 totaled a record 4.37 billion bu, with an average yield per acre of 50.7 bu.

US corn ending stocks for marketing year 2024-25 are pegged by the Reuters survey at 1.321 billion bu, with 2025-26 marketing year corn ending stocks seen at 1.900 billion bu. Marketing year 2024-25 US soybean stocks are seen at 345 million bu, with 2025-26 ending stocks at 355 million bu. US wheat ending stocks for marketing year 2025-26 are seen by the Reuters survey at 882 million bu.

US Crop Conditions Decline Slightly

The USDA’s US national crop condition ratings generally declined over the past week ended Sunday. That followed another week of widely variable weather in many key growing areas, ranging from near ideal, to hotter and drier, with heavy rainfall and flooding in parts of the region. The USDA says 72% of US corn is in good to excellent shape, down 1% on the week. 68% of US soybeans are good to excellent, 1% lower.

90% of US winter wheat has been harvested as of Sunday, compared to the five-year average of 91%.

49% of US spring wheat is called good to excellent, up 1%, and 16% is harvested, compared to the normal rate of 22%.

In Other News

– China levies preliminary duty on Canadian canola… China overnight announced a preliminary anti-dumping duty on Canadian canola imports…a fresh escalation in a year-long trade dispute that began with Ottawa’s imposition of tariffs on Chinese electric vehicle, steel and aluminum imports last August. The provisional rate will be set at 75.8%, effective from Thursday, the statement said. China is the world’s largest importer of canola…and is Canada’s largest canola seed customer…taking 4 to 5 MMT annually. This effectively ends Canada-China canola seed trade, and is devastating for the Prairie industry.

“This is huge. Who will pay a 75% deposit to bring Canadian canola to China? It is like telling Canada that we don’t need your canola, thank you very much,” said one Singapore-based oilseed trader. ICE canola futures plunged lower on the news.

The policy marks a shift from the conciliatory tone struck in June, when China’s Premier Li Qiang said there were no deep-seated conflicts of interest between the countries during a phone call with Canadian Prime Minister Mark Carney.

Last fall, China announced it would apply a 100% tariff rate effective March on canola meal and oil.

– Russian wheat export prices up… Russian wheat export prices rose last week as some farmers decided not to sell and wait for higher prices amid fairly strong demand from exporters. At the same time, analysts believe that export volumes in August will almost double compared to July, since more than half of the harvest of the new crop is complete.

The price for Russian wheat with 12.5% protein content for free-on-board (FOB) delivery in early September was US $239/tonne at the end of last week, up $3 from the previous week, said the IKAR consultancy. The price increase is due to the reluctance of farmers, primarily in southern regions, who have almost completed the wheat harvest, to sell at current prices. This is partly motivated by declining prospects for late crops in these regions due to difficult weather conditions. SovEcon consultancy estimated offers at $237-$239/t, compared with $237-$240 in the previous week.

Rainfall in central Russia over the next two weeks will hamper harvesting and may impair the quality of wheat. Abnormally hot weather continues in southern regions, according to Rusagrotrans. SovEcon also notes rainy weather in the Urals and Siberia.

– Ukraine increases 2025 grain crop forecast… Ukraine’s economy ministry has revised its 2025 grain crop forecast to 56 MMT from 54 MMT previously, Deputy Economy Minister Taras Vysotskiy told Reuters. He said a larger-than-expected corn harvest of around 28 MMT was the main reason for the higher estimate of overall grain production this year. Vysotskiy said that the wheat crop outlook was unchanged at about 21 MMT.

– Ukrainians brace for betrayal as Trump prepares to meet Putin… For many in Ukraine’s front-line cities, enduring nightly attacks from Russian drones and missiles may be less terrifying than giving in to anything Vladimir Putin proposes during his upcoming summit in Alaska with Donald Trump. Ukrainians appear extremely skeptical that Russia’s president wants to end the war or intends to offer any substantial concessions in his upcoming summit with US President Trump on Friday. “I hope Donald Trump will understand that Putin lied to him…and you can’t negotiate with people like [Putin],” said Arthur Korniyenko, a software developer based in the battle-scarred city of Zaporizhzhia.

Ukrainians and their supporters, especially in Europe, are apprehensive about how the negotiations in Alaska, in whatever form they take, will play out. They fear the summit represents a moment of peril rather than an opportunity to forge a lasting peace driven by shared democratic values and the sanctity of international borders.

Trump’s comments Monday did little to mitigate those fears, as he appeared to suggest Ukraine’s territorial integrity could be bartered away like a real estate deal. “There will be some swapping and changes of land,” he said in Washington, D.C., as he went to explain how Putin’s forces have seized prime oceanfront property along the Black Sea and the Sea of Azov. “It’s always the best property,” he added…seemingly willing to give away territory that belongs to neither of them.

Other observers frame the Alaska gathering as the latest act in a well-rehearsed performance, where Russia feigns interest in peace while preparing its next offensive.

– US extends China tariff truce for 90 more days… US President Trump extended a pause of higher tariffs on Chinese imported goods for another 90 days, into early November, in an effort to stabilize trade ties between the world’s two largest economies. Trump signed the order extending the truce through Nov. 10, deferring a tariff hike that was set to kick in today, with all other elements of the agreement remaining the same. The extension eases worries of a renewed tariff war for now and gives the two countries more time to come to an agreement.

– US run ag trade deficit… The US agricultural trade deficit hit a record high in the first half of 2025. Agricultural export value trailed the import value by $4.1 billion in June, a gap that’s 14% larger than a year ago, pushing the US ag sector’s trade deficit to $28.6 billion through the first half of 2025. For 50 years, the US ag sector has consistently had major trade surpluses, but the growing deficit signals a historic reversal for the sector.

Outside Markets

The Dow Jones Industrial Average lost 200.52 points on Monday to settle at 43,975.09, while the S&P 500 dipped 16 points lower to 6,373.45. Early Tuesday, the September Dow Jones Futures are up 166 points.

Global stock markets were subdued overnight as market enthusiasm about Washington and Beijing extending their tariff truce to November was tempered by jitters about US inflation data.

But after the 7:30 am CT release of US CPI for July, US stock markets turned up on US inflation data coming in about as the trade expected…the Street correctly projected a CPI gain of 0.2% from June and headline inflation up 2.7% year-over-year. Core US inflation at up 3.1% year-over-year was a tenth of point higher than expected, but not a shocker. The trade is feeling a bit more comfortable that US inflation is relatively under control, which opens the door to possible US Fed easing in September (lower interest rates).

TSX futures are pointed higher this morning after Canada’s main stock index posted marginal gains yesterday.

The September US Dollar Index is down 0.231 at 98.130. The Canadian dollar weakened against its US counterpart…currently quoted at 72.68 US cents.

Sept crude oil futures are down $0.45 at US $63.51/barrel. Oil prices are weaker despite a US-China tariff truce that may ease concerns an escalation of their trade war hat would otherwise hit oil consumption. Potentially weighing on the oil market, Donald Trump and Vladimir Putin are due to meet in Alaska on Friday to discuss an end to the war in Ukraine.

Grain Markets

Chicago soybean futures are pulling back this morning…down 10 to 13 cents/bu ahead of this morning’s USDA supply/demand report release at 11 am CT. Soybeans rallied on Monday, following a social media post from Trump on Sunday night. Front month futures closed with 20 to 24 cent gains. Nov beans are down 13 cents at $9.98/bu this morning. Monday’s double-digit rally quickly faded once the overnight markets started trading.

Donald Trump’s Sunday post citing hopes China quadruple US soybean orders sent the bean market higher on Monday despite having a snowballs chance of happening. Trump did extend a pause on his tariff increase on Chinese goods for 90 days on Monday.

Soymeal futures are down between $1 and $2/ton this morning after rallying $4 to $5/ton higher yesterday. Soyoil futures are falling 93 to 96 points lower this morning after finishing Monday up 26 to 53 points.

USDA’s weekly crop progress data on Monday afternoon showed 91% of the US bean crop blooming by Sunday, with 71% setting pods, both 1% behind normal. Soybean conditions were down 1 percentage point to 68% good/excellent.

Ahead of this morning’s USDA report, traders are looking for rising US soybean yield and production prospects. Analysts from private firms have USDA printing an average yield estimate of 53 bu/acre, a number the US has never before seen. A lack of business from China supports the consensus that the USDA could raise US soybean ending stocks estimates.

Chicago corn futures are down 2 to 3 cents this morning. The corn market posted Monday strength, holding the gains into the close…finishing up 2 to 3 cents across most nearbys.

USDA data showed the US corn crop at 94% silking, with 58% in the dough stage. The crop was also listed at 14% dented as of Sunday. Conditions slipped 1 point this week, to 72% good/excellent.

Ahead this morning’s USDA report, analysts are expecting a record high 184.3 bu/acre for a national US corn yield with a wide range of 181 to 189. Production is pegged at 15.995 billion bu, which would be up 290 million bu from last month’s estimate. Old crop US corn stocks are estimated to be pegged at 1.325 billion bu, down 15 million bu from last month. New crop is expected to be up 240 million bu to 1.9 billion bu.

US wheat markets are tipping lower this morning. Spring wheat futures are steady to a penny weaker. On the winter wheats…HRW futures are 5 to 6 cent lower, while SRW wheat is down 6 to 7 cents.

The US wheat complex pulled back into Monday’s close, as contracts saw mostly fractional gains. Minnie spring wheat saw a ¼ cent gain in September, but Dec ended down 2.5 cents. Sept spring wheat futures have attempted to clear overhead resistance at its 20-day moving average, but continues to fail and languish near its contract low. For now at least…seems there is minimal ability for the contract to rally off the recent contract low despite being technically oversold.

USDA crop progress data showed the US winter wheat 90% harvested, with 91% the normal harvest pace. The spring wheat harvest was 16% complete, behind the 22% average. Conditions were listed at 49% good/excellent, back up 1%, though still sharply below 72% a year ago.

Analysts estimate USDA’s US wheat production total to be tallied at 1.922 billion bu in today’s supply/demand report later this morning, which would be down 7 million bu from last month. They also see new crop stocks down 8 million bu to a still more than comfortable 882 million bu.

Traders are also monitoring winter wheat harvest activity in Europe, Ukraine, and Russia, along with conditions in Argentina and Australia.

CANADIAN GRAIN MARKET

ICE canola futures went along for the ride on Monday following a seemingly artificial rally in the Chicago soy complex. The soy complex strength was sparked by US President Trump’s social media post earlier in the day that China should quadruple its purchases of American soybeans, as a means of reducing its trade deficit with the US. Although such heavy buying seems pie-in-the-sky unlikely, the soybean market rallied strongly. Soyoil and soymeal were higher as well.

Rainfall over the past week has improved soil moisture levels in many parts of Western Canada, although some pockets of dryness remain. Additional precipitation is expected this week in western, northern and some eastern crop areas, while the southwest trends drier, according to World Weather Inc.

November canola rallied up $11.40 on Monday to close at $680.80/tonne, while January ended $11.20 higher at $692.20.

For today… canola futures are getting trashed this morning, plunging $38 to $43/tonne. The cascade of selling pressure to now new overnight lows comes on the news China is hitting Canadian canola imports with a 75.8% import tax. Ouch!…stops all future canola trade with our largest foreign seed buyer in its tracks. This is devastatingly bad news for the Canadian canola sector. Timing couldn’t have been worse with harvest approaching as little time is available to sort through a solution, short of Ottawa making quick concessions.

Not sure where China turns for an alternative to the 4 to 5 MMT of canola it gets annually from Canada. Australia may fill some of the void, but certainly not all of it. Maybe we trade Canada-China business with the Aussies for their business to Europe?

In the past with such political conflict with China…we have toll crushed some of our canola via the likes of the United Arab Emirates on the way to China.

But no matter you slice it, creates a complicated logistical scenario to export our canola exports. And it’s somewhat surprising news as it was just in June that China’s Premier Li Qiang reassured Prime Minister Carney that there were no serious issues between our countries…well…despite the Liberal government’s 100% tariffs on Chinese EVs, steel and aluminum. There’s that.

Nearby ICE Nov canola futures are crashing $44.80 lower this morning at $636.0/tonne…falling sharply below its 100-day, and now its 200-day moving averages.

One small silver-lining…Canada in the 2025-26 marketing was going to need to make a cut to exports given more limited new crop supply availability. But for today at least…bearish headline news has our market in the dumpster.