AM Market Report – August 18, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are weaker to start the new week…shedding mostly $2 to $3/tonne amid ongoing China tariffs worries and a slightly weaker US soy complex.

Chicago soybean futures are down 2 to 3 cents/bu this morning, with soyoil and meal markets are also leaning weaker. Beans are seeing some corrective selling pressure to start the trading week, following good gains posted Friday. Soybeans rallied sharply last week on a bullish USDA supply/demand report and Trump prompting of China to buy more US beans (though so far that’s not happening).

Chicago corn futures are fractionally to 2 cents lower this morning. On paper, the corn market should be tanking after last week’s USDA report that was bearish for corn…but it’s not…though the market is languishing not far from contract lows.

US winter wheat futures are trading 1 to 2 cents higher, while spring wheat is essentially unchanged. The wheats remain under technical selling pressure amid firmly bearish near-term charts.

In Other News

– Canada looking at support for canola farmers hit by China tariffs…Canada is focusing on a series of measures to support canola farmers hit by China’s latest tariffs, Prime Minister Mark Carney said, but did not give specific details. In a post on X, Carney also said Ottawa would advance a constructive dialogue with China to address trade concerns while diversifying its foreign trade.

Meanwhile, Canada is firmly rejecting China’s allegation that it is dumping canola seed into the Chinese market, following Beijing’s announcement of a steep preliminary anti-dumping duty of 75.8% on Canadian imports that officially took effect Thursday. International Trade Minister Maninder Sidhu and Agriculture Minister Heath MacDonald said they were “deeply disappointed” by the decision, which comes from a self-initiated Chinese investigation.

“We do not dump canola,” the ministers said in a joint statement, emphasizing that Canadian farmers supply world-class products to both domestic and international markets. They highlighted that Canadian canola meets the highest standards, supported by a robust inspection system, and reaffirmed the government’s commitment to securing fair market access for the industry.

China is Canada’s largest export market for canola seed after the United States, representing 67% of total canola seed exports in 2024…worth roughly $4 billion. Ottawa is seeking “constructive dialogue” with Beijing to resolve trade concerns but is also doubling down on export market diversification.

Ironically, Prairie farmers are being hit at the expense of another industry: Canada’s attempt to get into electrical vehicle manufacturing. It’s widely believed the real motive behind the new canola duty is to punish Canada for the 100% tariff on Chinese electric vehicles, announced by the federal government in October 2024.

Jeremy Paltiel, a Carleton University political science professor who specializes in China-Canada relations, agrees and feels China has a legitimate complaint: Canada’s EV tariff was imposed without providing justification to the World Trade Organization. “It is interesting that Canada went against its own commitment to WTO rules,” Paltiel said. “This is retaliation for something that Canada did.”

– No peace deal yet for Ukraine… US President Donald Trump set the bar low for the high-stakes meeting with his Russian counterpart in Alaska on Friday. Trump touted himself to the world as a master dealmaker and global peacemaker…but he couldn’t deliver, at least not yet. Trump, who seemed tired and even dejected as he spoke briefly to reporters alongside Russian President Vladimir Putin after a three-hour face-to-face, said the two sides weren’t able to close the deal on a plan for peace in Ukraine. The word ceasefire wasn’t uttered by either leader in the end.

Ahead of the meeting, Trump said, if Putin couldn’t cut a deal to bring the war to a close soon, he would hit Russian goods with a punishing 100% tariff. Then, he threatened to hike tariffs on India, a major buyer of Russian oil. There was also talk of major US sanctions on Russia, too, which is what experts say Putin fears the most.

In the end, Putin got a meeting, dodged any commitment to a ceasefire and Trump said nothing about tariffs or sanctions.

Now today, Ukrainian President Volodymyr Zelenskyy is in Washington, and will likely to be under heavy Trump pressure to agree to a swift end to Russia’s war in his country. Concessions will be asked of Zelenskyy. Fortunately, the leaders of Britain, Germany, France, Italy, Finland, the European Union and NATO, will also be in Washington to show solidarity with Ukraine and to press for strong security guarantees in any post-war settlement. European leaders held a call with Zelenskyy on Sunday to align on a common strategy ahead of the meetings with Trump.

Ukraine and its allies have long feared that Trump could press an agreement favourable to Moscow. However, they have taken heart from some developments, including Trump’s apparent willingness to provide post-settlement security guarantees for Ukraine.

– Alberta harvest underway as crop yield estimates creep higher… The harvest is underway across Alberta, with major crop yield estimates rising from two weeks ago. Friday’s weekly crop report showed the overall harvest at 2% complete as of Tuesday Aug 12, in line with the province’s five- and 10-year averages of 3%.

The report pegged the provincewide yield potential of major crops (spring wheat, oats, barley, canola, and dry peas) at about 15% above the five-year average as of Tuesday, up from 14% above two weeks earlier. At 49.4 bu/acre, the average expected Alberta spring wheat yield is little changed from 49 bu last year, while the average barley yield, at 66 bu/acre, is seen higher than last year’s 60.6 bu average. This year’s average expected dry pea yield of 42.7 bu/acre is also seen above 35.4 bu a year ago. On the other hand, the average oat yield of 69.5 bu/acre is projected down from 73.3 bu in 2024, and the average canola yield of 38.9 bu/acre is expected slightly below the previous year’s 39.1 bu.

– Brazil in talks with Canada to revive Mercosur trade deal… Brazil is engaged in a “constructive dialogue” with Canada to resume negotiations for a free trade agreement between South America’s Mercosur bloc and Ottawa, the Brazilian Foreign Trade Secretary said. Canadian officials are due to visit Brazil in late August, according to Tatiana Prazeres, Brazil’s Foreign Trade Secretary, who shared details of the visit in a written response to Reuters this week. Both countries are looking to diversify trade relations in light of uncertain policies out of the US.

Canada signaled renewed interest in restarting talks with Mercosur last month, as part of a broader push to diversify trade away from the United States amid uncertainty caused by tariffs imposed by US President Donald Trump. Sources from both Canada and Brazil told Reuters that Canada’s International Trade Minister, Maninder Sidhu, is expected to travel to Brasilia on August 25 to assess the conditions for a possible relaunching of negotiations. Formal negotiations could resume in late September or early October.

Mercosur includes Brazil, Argentina, Uruguay and Paraguay, with Bolivia in the process of becoming a full member.

– July US soybean crush jumps to a six-month high… The US soybean crush jumped to a six-month high in July and exceeded most trade estimates, according to US National Oilseed Processors Association (NOPA) data released on Friday. NOPA members, which account for more than 95% of the all soybeans processed in the United States, crushed 195.699 million bu last month, up 5.6% from the 185.270 million bu in June and up 7% from a July crush of 182.881 million bu a year ago. It was the largest July crush ever reported by NOPA and the fifth-largest for any month on record. Recent crush plant expansions and new plant openings amid soaring demand for soyoil to make biofuel have lifted U.S. crush capacity to record highs.

US soyoil stocks among NOPA members as of July 31 declined to 1.379 billion pounds, down 0.4% from stocks of 1.384 billion lbs at the end of June and down 8% from the 1.499 billion pounds in stocks a year earlier. Stocks, on average, were expected to dip to 1.380 billion pounds, according to estimates from six analysts.

– Rain helps brighten outlook for Australian wheat crop… Rainfall across most of Australia’s grain-growing regions in July has lifted forecasts for the country’s 2025 wheat harvest to around 33 MMT. In early June, when parts of Australia were still parched, the agriculture ministry said it expected wheat production this year of 30.6 MMT…but is now likely to match or beat last year’s production of around 34 MMT.

Some cropping areas, particularly South Australia and parts of Victoria, suffered from dry starts to the growing season, but rain has dampened soil, and Australia’s weather bureau is forecasting above-median rain for most farms in the next three months.

Australia has had a run of large harvests this decade thanks to favourable weather and improving farm management. Annual wheat production averaged 33.8 MMT in the five years to 2024, agriculture ministry data show. In the five years before that, it averaged 21.4 MMT.

– Larger German wheat, rapeseed crop expected… Germany’s 2025 wheat crop will likely jump 21.1% year on year to 22.42 MMT, with repeated rain as harvesting started causing less damage than feared, the country’s association of farm cooperatives, DRV, said. It forecast Germany’s harvest of winter rapeseed, used for vegetable oil and biodiesel production, will rise 7.0% on-year to 3.87 MMT. This compared to the association’s previous forecast in July of a German 2025 wheat crop of 21.56 MMT and a rapeseed crop of 3.88 MMT, given before rain fell just as harvesting was starting.

German crops suffered from repeated rains in July and August just as crops were ripe and ready for harvesting, the association said. Rain falling on ripe grains is a serious threat to harvest quality. There are indications that the rain caused some loss in wheat’s protein content and Hagberg falling numbers. But rain damage is not as bad as some had expected, although it is too early to make a final judgement with harvesting continuing.

Germany is the European Union’s second-largest wheat producer after France and one of the bloc’s leading rapeseed producers.

Germany’s winter barley crop, mostly used for animal feed, is expected to fall 0.8% on the year to 8.66 MMT, following reduced sowed area. The spring barley crop, generally used for beer and malt production, is seen falling 14.4% to 1.60 MMT, partly due to the mild winter reduced the need to replace winter crops with spring sowings.

– Russia expects 2025 record sunflower harvest... The sunflower harvest in Russia is expected to be record high this year, despite forecasts of a significant decline in the main southern regions, thanks to an increase in acreage and good forecasts for other regions of the country, analysts say. Russia’s IKAR consultancy forecasts a record 17.9 to 18 MMT compared to 16.2 MMT in 2024, and SovEcon also expects a record 17.9 MMT. “The decline in the southern regions is offset by high figures for the Centre and Volga regions, where conditions are favourable, and we estimate that yields there will be above average,” said Andrei Sizov, head of SovEcon. The increase in production is likely to lead to a rise in exports of sunflower oil which could potentially surpass those of Ukraine, currently the world’s top exporter.

– Draft ‘MAHA’ commission report avoids pesticide crackdown feared by US farm groups... The White House will not impose new guardrails on the US farm industry’s use of pesticides as part of a strategy to address children’s health outcomes, according to a draft obtained by Reuters of a widely anticipated report from President Donald Trump’s “Make America Healthy Again” commission. The draft document recommends that the administration promote healthier diets and examine vaccines and prescription drugs, but stops short of advising any change to how the US approves or regulates agrochemicals. The Trump administration has worked to balance the demands of the MAHA movement aligned with Health and Human Services head, Robert F. Kennedy Jr., a vaccine skeptic, with the concerns of farmers and ranchers, a key Trump constituency.

Outside Markets

The Dow Jones Industrial Average edged up 34.86 points to settle Friday at 44,946.12, but the S&P 500 dipped 18.74 points to 6,449.80. Early Monday, the September Dow Jones Futures are down a modest 25 points.

Global stock markets are drifting slightly lower ahead of what is likely to be an eventful week for US interest rate policy. Federal Reserve chair Jerome Powell is set to speak later this week at the Jackson Hole symposium on the US economic outlook and the central bank’s policy framework.

Investors are also bracing for US President Donald Trump’s meeting with Ukrainian President Volodymyr Zelensky and European leaders later today, after Trump’s summit with Russian President Vladimir Putin in Alaska on Friday.

Wall Street futures were in negative territory this morning, while Canada’s TSX futures followed sentiment lower ahead of inflation data tomorrow.

The September US Dollar Index is up 0.198 at 97.910. The Canadian dollar strengthened against its US counterpart…currently quoted at 72.56 US cents.

Sept crude oil futures are down $0.44 at US $62.36/barrel. Oil prices are weaker after White House trade adviser Peter Navarro said India’s purchases of Russian crude were funding Moscow’s war in Ukraine and had to stop, while traders looked to the outcome from today’s Trump-Zelensky meeting.

“Market focus now shifts to today’s Washington meeting for signs of a deal that could eventually boost crude and gas supply,” said Saxo Bank’s head of commodity strategy, Ole Hansen. “I don’t believe the oil market has priced in a full peace dividend that potentially could see prices of crude and EU gas suffer further setbacks.”

Grain Markets

Chicago soybean futures are ticking 2 to 3 cents/bu lower to start this morning. Bean futures rallied 12 to 14 cents on Friday. Nov beans are 2.25 cents lower this morning at $10.40/bu after charging up 55 cents last week. The bean market last week had a tailwind from the bullish USDA supply/demand report, noting 2025-26 US bean ending stocks dropping to 290 million bu.

Soymeal futures are down less $1/ton this morning. Soyoil futures are 22 to 39 points lower this morning after rallying 100 to 117 points on Friday.

Rains made their way through a wide swath of the US soybean belt over the weekend. Precip is limited to southern Wisconsin and northern Illinois today into tomorrow, with the forecast drying off after. Beans will need nearly ideal weather to meet the USDA’s projected record average yield guess.

Friday afternoon’s Commitment of Traders report indicated 30,660 contracts cut from the net short position in CBOT soybean futures as of Aug 12, taking it to 35,270 contracts net short.

NOPA’s US crush report from Friday showed a record 195.7 million bu of soybeans crushed among members in July. That was 7.01% increase from last year, above estimates, and the highest since January. Soyoil stocks were tallied at 1.378 billion lbs, a 0.8% increase from June but 14.68% below last year reflecting strong vegoil demand.

US domestic demand is good, but new crop exports are slow with China not buying US beans. The US has a price advantage, but Beijing continues to focus on Brazil due to the tariff tensions with the US. No high-level meetings on trade between the US and China are expected to occur for weeks.

Brazil’s CONAB agency projected a record soy crop of 169.6 MMT, compared with last year’s production at 153 MMT.

Chicago corn futures are steady to 2 cents lower this morning. The corn market rallied 7 to 8 cents higher on Friday…helped by last week’s rally in soybeans. Dec corn is 0.75 cents lower this morning at $4.04/bu after finishing last week about unchanged. Price action last week, while still near contract lows, just holding its ground was considered a win for market bulls given USDA projecting 1 billion more bushels on the US balance sheet than the week started with.

Demand for US corn is strong. But market headlines are not bullish. Brazil’s CONAB agency has raised its corn crop estimates. Argentine farmers are planning to increase corn area by 15% to 20%. Last week’s USDA record-large US corn yield estimates hang over the market

The large managed money spec funds in CBOT corn futures added 2,364 contracts to their net short as of Aug 12. They took that to 176,114 contracts net short by last Tuesday.

US winter wheat markets are leaning 1 to 2 cents higher this morning, with Minnie spring wheat futures steady to fractionally mixed. The US wheat complex was mixed to round out last week with the spring wheat market reverting lower…losing 2 to 3 cents on Friday, with Sept contract down 6.75 cents last week.

Russia and the European Union have large supplies, weighing on the wheat market. The US spring wheat harvest is putting downward pressure on prices as well…with the Canadian Prairies soon expected to swing into harvest.

Wheat markets remain in a solid bearish trend, and spec funds remain net-short a sizeable position in Chicago and Kansas City wheat futures.

CANADIAN GRAIN MARKET

ICE canola futures on Friday took back most of the previous day’s losses, but remains wary in the aftermath of China last Thursday employing a new anti-dumping duty on imports of Canadian canola. China slapped a provisional anti-dumping duty of nearly 76% on imports of Canadian canola.

Industry officials say new current duty, if left unchanged, will choke off all remaining canola trade between the two countries. However, tight old-crop supplies, and expectations of a continued tight canola balance sheet in 2025-26, are reportedly helping to underpin the market.

Gains in Chicago soybeans and soyoil, along with Malaysian palm oil, further support canola on Friday. European rapeseed was lower.

November canola gained $6.40 on Friday to close at $660.90/tonne, and January was up $5.70 at $672.70.

For today… canola futures are fading mostly $2 to $3/tonne lower to start this morning…giving back some of Friday’s gains. Nov canola is down $2.20 this morning at $658.70/tonne, adding to its $8.50/t loss posted last week. Nov over the past few trading sessions has been flirting with 200-day moving average ($649).

Canola futures are down sharply since the June seasonal price highs…and feeling further pressured in recent days since China last week announced preliminary anti-dumping tariffs on canola seed. At nearly 76%, the tariff effectively closes the Chinese market to the Canadian oilseed.

While the anti-dumping investigation is the official public reason for the tariff, we all know it’s really about the tangled mess of diplomatic relations between Canada, the U.S., and China and the resulting tariffs on EVs, steel and aluminum.

The canola harvest begins in late August and moves into high gear in early September…making the China move especially distressing with new crop Canadian supply soon coming to market amid weakening Prairie cash bids.

Farmer deliveries during September are expected to reach 2.0 MMT. During October and November, farmer selling will be in the range of 2.0 to 2.5 MMT per month. The November/January canola futures spread has widened from $8.00 on July 3 to $12 this morning. The widening of the spread is a bearish signal for the market and reflects basis deterioration.

Related outside markets… CBOT soy complex futures are slightly weaker this morning, though EU rapeseed is up slightly. Worth noting…Malaysian palm oil futures gapped higher overnight to fresh contract highs. Seems strong Chinese domestic vegoil prices are attracting palm oil…perhaps given Canadian canola being cut out of the picture.

Friday’s Commitments of Traders report confirmed managed money traders had indeed been active sellers ahead of the Aug 12 cutoff (on the China news). They sold off 29,934 of their net-long positions during the week ended last Tuesday, leaving them with only 54,732 contracts net long.

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