AM Market Report – August 13, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are trying to steady themselves following yesterday’s bearish news of China import duties being levies against Canadian canola, which plunged the market lower on Tuesday. This morning, canola futures are rebounding $8 to $9/tonne higher. But serious chart damage was done with yesterday’s sell-off, and uncertainty reigns in the canola export world.

Meanwhile, US grain markets are mostly firmer this morning. Chicago soybeans are advancing 6 to 9 cents/bu higher in what is now an impressive three consecutive trading session rally. Bean bulls gained momentum following Tuesday’s friendly USDA report. However, it will be tougher for soybean markets to sustain price rallies if corn prices continue to slump.

Chicago corn futures are up 1 to 2 cents this morning, ticking slightly up from the plunge to contract lows posted on Tuesday. Corn bulls are working to stabilize their market following Tuesday’s surprisingly bearish USDA report. USDA yesterday projected a record-shattering US corn harvest this year as farmers planted more acres than expected and the crop faced few weather challenges this summer.

Corn bulls are hoping Tuesday’s big downdraft was a capitulation-type price move that would suggest a market bottom is in place or close at hand…but that is hardly proven at this point. The direction of price action the rest of this week will be extra important for the corn market.

US wheat markets are mixed this morning…winter wheats fractionally to 2 cents lower, while spring wheat is up a penny or two on the nearby contracts.

Tuesday’s USDA Report

Analysts polled ahead of the report had been expecting the USDA to raise its US corn and soy yield outlooks following favourable summer weather. But the agency’s large corn planted acres increase, and its big cut to soybean plantings, shocked the market.

USDA slashed 2.5 million from US soybean planted acres, putting 2.1 million of those acres into corn to increase the size of that crop that already had the bumper yield.

The USDA projected a national average US corn yield of 188.8 bu/acre and a 16.742 billion bu harvest, both all-time records and well above analysts’ pre-report estimates.

US soybean yields were seen at a record 53.6 bu/acre, although the total crop was only forecast to be the sixth largest ever at 4.292 billion bu.

In Other News

– China raises canola duties… As reported yesterday, Canada is about to be hit with another tariff hike, this time from China. China is raising duties on Canadian canola after a bogus anti-dumping probe. China plans to impose a 75.8% duty starting Thursday (Aug 14) after a preliminary ruling found Canadian imports constitute dumping, according to a statement from China’s commerce ministry…claiming to hurt the Chinese domestic canola oil sector.

Earlier this year, Beijing imposed a 100% tariff on Canadian canola meal and oil imports (also peas), in response to Canadian levies on Chinese-made electric vehicles, steel and aluminum.

China’s move effectively shuts Canadian canola out of the Chinese market.

There is no doubt this is all about trade retaliation in response to Canada’s first strike tariffs on China…with Beijing’s canola anti-dumping claim just a facade. It’s not a surprise the canola tariff has come…we’ve been worrying about it for months. But the canola industry was surprised when it was finally declared and at what level the tariffs were going to be applied at.

This news is obviously frustrating for canola growers innocently caught in the middle of a trade war that producers didn’t want, start, or have any influence on. Leading canola grower and trade associations are calling on the Canadian government to intervene immediately to help restore access.

Speaking in Saskatoon on Tuesday, Saskatchewan Premier Scott Moe said he has reached out to Prime Minister Mark Carney to speak with him on the issue and get it “dealt with immediately.”

Moe said the Canadian canola sector is larger than the steel, aluminum and electric vehicle industries combined. “Our federal government cannot sacrifice a $43-billion canola industry, 200,000 jobs in that industry that is largely based, in fairness, in Western Canada, to protect the fledging electric vehicle industry, largely based in Eastern Canada,” Moe said.

Ottawa has said China has until September, when its investigation formally ends, to make a final decision on the duties, but it could extend the deadline by six months. Canadian canola exports to China totaled $5 billion in 2023.

Separately, China also launched an anti-dumping investigation into pea starch imported from Canada.

– US losing out on China soybean sales… US soybean exporters risk missing out on billions of dollars worth of sales to China this year as trade talks drag on and buyers in the top oilseed importer lock in cargoes from Brazil for shipment during the key US marketing season. Chinese importers have finished booking soybean cargoes for September, taking around 8 MMT, all from South America, according to traders. For October, Chinese buyers have already secured about 4 MMT…half of their expected requirement…also from South America.

China’s heavy Q3 soybean purchases suggest the industry has built up inventories ahead of potential Q4 supply risks.

Last year, Chinese oilseed importers bought around 7 MMT from the US for shipments during those two months. US soy sales to China for that same time period this year are ZERO.

The risk of a prolonged absence of Chinese purchases for the US bean crop year starting in September amid unresolved trade tensions could add pressure on Chicago futures. Typically, most Chinese purchases of US soybeans in any given yea are shipped between September and January, before next new crop Brazilian supplies take over after South America’s harvest.

China has been cutting its dependence on US agricultural products since the trade war under US President Donald Trump’s first term. Last year, China imported roughly 105 MMT of soybeans. Of that, 22.13 MMT came from the US.

On Sunday, Trump urged China to quadruple its soybean purchases ahead of a tariff truce deadline, an absurd target that unfeasible would require China to buy almost exclusively from the US. That’s not going to happen.

– Lentil quality becomes a concern… Widespread rain across the southern Prairie grain belt in recent weeks is causing crop quality concerns, particularly with large green lentils. There was a big shift this year from red lentils to green lentils, particularly large greens, because the green lentil price was substantially higher. However, large green lentils can lose quality quickly if the weather turns wet when the crop is nearly mature. And that’s what has happened for many growers. In some cases, fields were desiccated and almost ready to combine and then were hit with numerous rains.

Too many bleached seeds in a sample causes downgrading and that comes with a lower price. Many observers expect the price discount for No. 3 and lower grade lentils will widen because a significant portion of the crop could be lower grade. In addition, seed that has gone through a number of wetting and drying cycles is more prone to cracking. Producers won’t really know the quality damage until combining becomes more general.

– CGC hopes producers take part in Harvest Sample Program… The Canadian Grain Commission (CGC) is inviting producers to take part in their Harvest Sample Program, letting them send in samples from their grain harvest to be graded. The no-cost grading helps farmers know exactly what they’ve got in their fields, letting them easily market their grain to sellers.

Kerri Pleskach, the program manager of analytical services at the CGC, explains how producers can take part. “What they can do is they can sign up for our program. We will send them a package with a bunch of envelopes, which indicate what different commodities they’re growing. The envelopes come in this big package. They’re already sent out for this year, but they can still sign up going into November.”

“Once a producer has harvested their crop, they fill this prepaid envelope up with their grain and put it in Canada Post, and it comes here to the Canadian Grain Commission. Once we receive it, our inspectors inspect it, and we will run protein on all commodities.”

“Then the producer will get a preliminary report, and they will have their grade of their commodity, as well as any degrading factors and their protein content. After that, we do other analytical tests on the sample, depending on what commodity it is, and then they’ll get a final report at the end with all of their analysis.”

The program accepts all 21 official grains in Canada, so any grain farmer can be assured they qualify. Pleskach says the whole benefit of the program for farmers is helping them know exactly what they’re growing and eventually selling.

“We also use the samples for evaluating the grain grading standards. So we conduct research on the grading factors to ensure that the grading factor tolerances reflect the impact on end-use functionality. So that also allows us to keep up Canada’s high reputation for high-quality grain.”

The CGC also does some research on any leftover grain, which includes grain quality and grain safety issues, to help support new markets for crops.

People can find more information on the program by heading to grainscanada.gc.ca and going to their Harvest Sample Program page. People can also call their toll-free number, 1-800-853-6705, or email them at harvest-recolte@grainscanada.gc.ca. CGC accepts sign-ups until mid-November, with sample packages accepted until December 31st.

Outside Markets

The Dow Jones Industrial Average rallied 483.52 points higher on Tuesday to settle at 44,458.61, while the S&P 500 jumped 72.31 points to 6,445.76. Early Wednesday, the September Dow Jones Futures are up 265 points.

Global stock markets are on the rise again this morning as investors cheered mild US inflation data and signs of resilience in major economies, and expectations of a US interest rate cut buoyed demand for riskier assets.

Wall Street futures were in positive territory this morni9ng after major indexes closed higher yesterday. TSX futures are following sentiment higher after Canada’s main stock market closed at a fresh record high yesterday.

“The fact that US CPI data was broadly as expected was met with relief, leading to equity gains and tighter credit spreads as investors became increasingly confident about another US interest rate cut,” Deutsche Bank analysts wrote.

The September US Dollar Index is down 0.272 at 97.655. The Canadian dollar strengthened against its US counterpart…currently quoted at 72.71 US cents.

Sept crude oil futures are down $0.17 at US $63.00/barrel. Oil prices are steady to slightly weaker this morning…still trending lower this month.

Global oil markets are on track for a record crude oil supply surplus next year as demand growth slows and supplies rise, the International Energy Agency reported. Oil inventories will accumulate at a rate of 2.96 million barrels a day, surpassing even the average buildup during the pandemic year of 2020, data from the IEA’s monthly report showed. The IEA said “Oil-market balances look ever more bloated as forecast supply far eclipses demand towards year-end and in 2026,” and said, “It is clear that something will have to give for the market to balance.”

Grain Markets

Chicago soybean futures are trading 6 to 10 cents/bu higher this morning…up for a third straight session. Bean futures closed out Tuesday’s session with contracts up 21 to 22 cents across the front months. Nov soybean futures are up 9.75 cents this morning at $10.42/bu…now an impressive 3-day rally back above all its key moving averages and back to its highest price level since the start of July.

Soymeal futures are up $1/ton this morning…posting similar gains yesterday. Soyoil futures are 44 to 54 points higher this morning after modest 1 to 15 points gains on Tuesday.

USDA’s report yesterday showed offsetting changes on the supply side, as US soybean acreage was cut a massive 2.5 million acres to 80.9 million. But US national average yield was pegged at a record 53.6 bu/acre, which was above the trade ideas. US soy production was tallied at 4.292 billion bu, a 43 million bu reduction from USDA’s July report vs trade ideas of a production hike.

Old crop US soy carryout was cut by 20 million bu to 330 million bu, as exports and crush each saw a 10 million bu hike. New crop US stocks were shown 30 million bu tighter to 290 million, as the drop in production was partly offset by a drop to exports.

The big question for new crop export demand continues to be China. US tariffs on China have been paused another 90-days, but the lack of any public progress is definitely psychologically bearish.

Chicago corn futures are trading around 2 cents higher this morning…clawing back a portion of yesterday punch to fresh contract lows. the corn market sold off on Tuesday as USDA added more than 1 billion bu to the balance sheet. Contracts closed with losses of 12 to 13 cents yesterday.

Tuesday’s USDA report showed the US national corn yield at a record 188.8 bu/acre, which was above the trade ideas of 184.3. Production was pegged at 16.742 billion bu (record large), up a massive 1.037 billion bu from last month’s forecast. Acreage was a big reason as a surprising 2.1 million planted acres were added this month to 97.3 million acres.

Old crop US corn stocks were pegged at 1.305 billion bu, down 35 million bu from last month, as exports were raised by 70 million bu, with corn used in ethanol trimmed back. With the production changes, US new crop corn stocks rose by 457 million bu to 2.117 billion…with USDA raising new crop usage categories to offset the huge production guesstimate.

US wheat markets are steady to edging slightly lower this morning… Minnie spring wheat futures 1 to 2 cents higher on the nearby contracts but a penny lower on the deferreds, HRW 1 to 2 cents lower and SRW wheat steady to a penny weaker. The US wheat complex fell on Tuesday, as USDA added some bushels to the US winter wheat output…though Minnie spring wheat futures were the firmest, down just fractionally on the day.

Wheat markets generally remain a dog, with Minnie spring wheat futures still struggling near contract lows and unable to get back above its 20-day moving average.

USDA trimmed the US wheat production total by just 2 million bu to 1.927 billion bu in Tuesday’s report. Winter wheat was raised by 10 million bu to 1.355 billion bu, with US spring wheat down 20 million bu.

Globally, estimated 2025-26 wheat production is down 1.65 MMT this month to 806.9 MMT, driven by a 2 MMT cut for China to 140 MMT on weaker yields, along with smaller crops in Brazil and Argentina. These declines were partially offset by a 1 MMT increase for the EU to 138.25 MMT…its largest output since 2021-22.

Global wheat ending stocks fell 1.4 MMT to 260.08 MMT, the lowest since 2015-16.

CANADIAN GRAIN MARKET

ICE canola futures were hammered lower on Tuesday, with the market dragged down on the announcement of Chinese anti-dumping duties. China’s Ministry of Commerce announced the imposition of a 75.8% duty, collected in the form of a deposit, on all Canadian canola seed shipments as of Aug 14. The duty will remain in place pending a final decision in September.

China is Canada’s second-largest market for canola and related products, with exports valued at $4.9 billion in 2024. If upheld, the preliminary duty will make Canadian canola commercially unviable in China.

European rapeseed futures were also lower on the day, but Chicago soybean/soyoil and Malaysian palm oil gained.

November canola dropped $30.50 yesterday to settle at $650.30/tonne, and January lost $29.10 to $663.10.

For today… canola futures this morning are bouncing up $8 to $9/tonne, regaining a portion of yesterday’s $30/t flush out.

Our canola market is still reeling from yesterday’s announcement that China will hit Canadian canola seed imports with preliminary 75.8% duties starting Thursday, escalating a year-long trade dispute. We have seen a setback in canola futures in response, compounded by widening cash basis in the country…taken to an extreme by reports in some cases of grain buyers temporarily pulling cash bids amid an uncertain trade environment.

With harvest just ahead, there is no doubt China’s move was timed for impact and will have a major effect on farmers’ 2025-26 marketing opportunities. It’s a confused market right now.

China did not say on Tuesday how long the duties would last. A permanent decision on tariffs was expected for September, but the preliminary duty has some wondering whether the timeline might be extended.

The headline story is of course distressing. However…searching for a silver-lining here…diminished Canadian canola supply in 2025/26 meant we were going to have to pull back exports to some extent anyways. The trade was already penciling in a 2.5 MMT reduction in canola exports in 2025/26 from the 9.5 MMT expected to have moved in 2024/25 because of diminished supply.

Still…China accounts for roughly half of all of Canada’s canola exports, so the news remains a psychological blow to the industry.

Canada has experienced trade issues with China in the past, with those previous limits on direct business leading to shifts in trade flows like increased sales to the United Arab Emirates, who crushed the seed and sent the processed oil and meal to China. Other exporters like Australia can’t replace all the lost Canadian business and expected to see similar adjustments in the global trade.

With China…by far Canada’s biggest canola seed market…unavailable to us for the time being, we’ll likely try to sell more to other customers like Europe, Japan, Mexico and the United States. But China demand volume is not easy to replace…and those other demand players know that without China the price is going lower, so they don’t have to be aggressive on their bids.

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