AM Market Report – August 19, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are slipping another $2/tonne lower to start this morning. Chicago soybeans are down around a penny…with soymeal higher and soyoil lower. CBOT corn futures are falling 3 to 4 cents/bu lower.

Soybean and corn futures are chopping around as industry players await the results of this week’s annual Pro Farmer crop tour in the US Midwest. The crop tour will estimate US corn yields and gauge soybean production potential across seven US states after forecasts by the USDA last week of a record large US corn crop.

US winter wheat futures are trading 3 to 7 cents lower, while Minnie spring wheat futures are narrowly mixed. Wheat prices are under pressure from weaker corn and on more chart-based selling from the speculators. But an uptick in export demand for US wheat has provided some underlying price support.

The USDA’s weekly US crop condition rating changes were mixed over the past week. Weather was mixed in many key US growing areas, ranging from hot and dry, to cold and wet, to nearly ideal…even varying widely during the course of the week in parts of the region.

The USDA says 71% of US corn is good to excellent, 1% below a week ago. 68% of US soybeans are called good to excellent, unchanged.

94% of US winter wheat is harvested, compared to 95% normally in mid-August. 50% of US spring wheat is in good to excellent shape, up 1%, and 36% is harvested, in-line with most years.

In Other News

– China buys first Australian canola cargo since 2020… Chinese state-run trading firm COFCO has booked a cargo of about 50,000 tonnes of new-crop Australian canola, two traders told Reuters, just days after Beijing imposed temporary levies on top supplier Canada. The purchase would mark China’s first imports from Australia since 2020 when Australia, the world’s second-largest canola exporter, was locked out of the Chinese market, largely due to phytosanitary restrictions aimed at preventing the spread of fungal plant disease. COFCO has purchased the cargo for November-December shipment and is negotiating for more deals, according to the two sources with direct knowledge of the deal. The purchase price is below US $600/tonne, including freight, the sources said.

Reuters reported in July that Canberra was close to reaching an agreement with Beijing to allow Australian suppliers to ship five trial canola cargoes to China. It remains unclear whether COFCO’s recent purchases are part of this trial agreement.

As the world’s largest canola importer, China has sourced nearly all of its canola from Canada in recent years. However, Beijing’s decision last week to impose a temporary 75.8% levy is expected to cut off Canadian canola from the Asian market.

– Pro Farmer Crop Tour scouts find record US corn, soybean yield potentials in South Dakota, variable crops in Ohio… Monday’s first leg of the annual US Pro Farmer Crop Tour saw adequate moisture in South Dakota, suggesting the potential for record corn and soybean crops. However, Ohio weather has turned drier, which could crimp yields.

The results from Crop Tour, Day One, showed the southern portion of South Dakota is poised for strong yields this year. The South Dakota corn yield tour estimate came in at 174.18 bu/acre, an 11.3% increase from the 156.5 bu/acre scouts found on the 2024 tour. The corn yield is also above the three-year average of 144 bu/acre. For soybeans, South Dakota pod counts came in at 1,188.45 in a 3’x3′ square, which is 15.9% above last year’s tour and well above the three-year average of 970.1 pods.

In Ohio, Pro Farmer scouts found a more variable corn crop, but one that still has solid yield potential in corn. The corn yield from this year’s Crop Tour came in at 185.7 bu/acre, which beat last year by 1.3%. It’s also above the three-year average of 180.5 bu/acre. For soybeans, the pod count in Ohio was even stronger, but moisture is a concern to finish the season. Scouts saw an average pod count of 1,287.3 in a 3′ x 3′ area, which is a 4.7% increase year-over-year. The moisture situation is drastically different in Ohio, with scouts reporting less moisture than they found last year, which means some of those pods may be at risk.

– Trump, Zelensky discuss meeting with Putin as European leaders gather in Washington… During yesterday’s high stakes meeting seeking solutions to end the Russian-Ukraine war, US President Donald Trump took a step toward that long-sought resolution, agreeing to back security guarantees for Ukraine as part of a deal. He didn’t rule out the possibility that US troops might be sent to Ukraine as part of it. And both he and Mr. Zelensky agreed to seek a trilateral sit-down with Russian President Vladimir Putin.

But the US President also pressed his Ukrainian President Volodymyr Zelensky to make territorial concessions to Russia, pushed back against calls for a ceasefire from US allies, and offered little detail on what a security guarantee would look like.

Zelensky, for his part, aimed studiously to avoid a repeat of his last visit to the Oval Office, during which Trump publicly berated him for not displaying sufficient gratitude to the United States.

The Ukrainian leader repeatedly thanked Mr. Trump for trying to get a deal and carefully avoided contradicting him. He also brought with him the leaders of Germany, Britain, France, Italy, Finland, the North Atlantic Treaty Organization and the European Union, in part as a buffer against another explosion by Trump and in part to help resist pressure from Trump to make concessions to Moscow.

– Industry wants ag to become national priority… Thirty agricultural associations from across the country have urged Prime Minister Mark Carney to remember agriculture as his government focuses on strengthening the economy. Organizations such as the Canadian Federation of Agriculture, the Canadian Cattle Association, Grain Growers of Canada, the supply managed associations and others offered four priorities on behalf of the sector, saying they want agriculture and agri-food treated as a strategically important sector.

In their open letter, called Let’s Grow Canada, the associations called on the government to:

– Create a focused plan for economic growth in the sector and support food security.
– Ensure regulations support growth.
– Prioritize transportation and trade infrastructure.
– Modernize risk management tools.

Federal Agriculture Minister Heath MacDonald’s recent meetings with investors could be a sign the government is already acting on the first request. He hosted a round table with Farm Credit Canada and several investors and fund managers who are interested in agriculture and ag-tech.

On that point, the organizations said agriculture should be a national priority with clear targets for production growth, investment in innovation, value-added processing, exports and a stable labour supply.

Regulations should support growth “by aligning the mandate of key government regulators with Canada’s food security and agricultural competitiveness goals, and by reducing regulatory burden and making Canada a top destination for investment and innovation.”

Infrastructure that supports agriculture, including rail, port, cold chain and rural infrastructure, must be reliable, the letter said.

Risk management tools have to respond to current climate and market conditions, as well as ensure mitigation measures are in place to support ongoing trade and climate disruptions, it said.

Agriculture contributes about $150 billion annually to the gross domestic product and employs 2.3 million people, which are more than the automotive, forestry, steel and aluminum, and oil and gas sectors combined. It is the largest manufacturing sector in the country.

The signatories said other countries are making bold investments in agriculture, but Canada has been slow to respond. To change course agriculture must be a national priority, backed by meaningful investment and coordinated federal leadership, the letter said.

– Brazil regulator suspends soy moratorium… Brazil’s competition authority CADE has given grain traders in the world’s largest soybean exporter 10 days to suspend a program called “soy moratorium” or face hefty fines, in a ruling seen by Reuters. The two-decade-old private pact sought to protect the Amazon rainforest, by barring soybean traders from buying bean from farmers who cleared land there after July 2008, but it represents a potential breach of Brazilian competition law.

In his signed decision, the agency’s general superintendent Alexandre Barreto de Souza called for a full investigation into the signatories of the voluntary corporate program in which companies share commercially sensitive information. Firms wishing to apply soy moratorium criteria to buy soybeans grown in the Amazon “must do so independently and in accordance with national legislation,” he wrote.

However, environmental group Greenpeace said the ruling was the result of pressure from the farm lobby, compromising nearly two decades of progress. “By suspending the moratorium, CADE not only encourages deforestation but also silences consumers’ right to choose products that do not contribute to the devastation of the Amazon,” it said in a statement after the ruling was issued. The attacks on the pact “are political and favor precisely those who profit most from the destruction of the Amazon,” it added.

Outside Markets

The Dow Jones Industrial Average ticked 34.30 points lower on Monday to settle at 44,911.82, while the S&P 500 edged down 0.65 of a point to 6,449.15. Early Tuesday, the September Dow Jones Futures are up 93 points.

US stock index futures are mixed this morning (Dow higher, while S&P 500 and Nasdaq slightly weaker). European stock markets were higher overnight, while Asian markets were down slightly. Traders remain cautious this week ahead of a key meeting of central bankers and as traders evaluate diplomatic signals toward ending hostilities between Russia and Ukraine.

Canada’s TSX stock futures are pointed modestly higher as Air Canada and striking flight attendants reach a tentative deal.

Good news/bad news story on Canada’s inflation dynamics from Statistics Canada this morning. Good news…Canada headline inflation was pegged at 1.7% in July relative to a year ago…below trade expectations of a 1.8% jump and down from 1.9% in June. However (bad news), core inflation remains stubbornly high at 3%. Headline inflation is being slowed by the lingering effects of the government cancelling the carbon tax on energy purchases earlier this year, but overall inflation is still higher than preferred as Canada/US tariff/trade war effects filter through.

In the US, the Federal Reserve gathering in Jackson Hole, Wyo., later this week “looms as one potential source of volatility, and going into the event, the markets remain cautious,” Kyle Rodda, an analyst at Capital.com, wrote in a note to clients. “A dovish shift is being priced in, with further strength in equity markets…and weakness in the US dollar…reliant on the Fed meeting these expectations.”

The September US Dollar Index is down 0.022 at 97.995. The Canadian dollar weakened against its US counterpart…currently quoted at 72.32 US cents.

Oct crude oil futures are down $0.81 at US $61.89/barrel. Oil prices slipped as market participants contemplated a potential end to the war in Ukraine, which could lead to an end to sanctions on Russian crude.

Grain Markets

Chicago soybean futures are down around a penny this morning. Bean futures eased lower on Monday, with contracts down 1 to 2 cents on the session. Soymeal futures are up $2 to $3/tonne this morning, but soyoil futures are losing 60 to 66 points.

The annual US Pro Farmer Crop Tour got kicked off on Monday, with the first legs in Ohio and South Dakota. Ohio pod counts averaged 1,287.28, which was 4.66% above last year and 6.84% larger than the 3-year average. Pod counts in South Dakota were up 15.84% from a year ago at 1,188.45, which was also 22.51% above the 3-year average.

US growing season weather remains generally favorable for this year’s US soybean crop. The USDA says 68% of US soybeans are in good to excellent shape, unchanged on the week.

Monday’s export inspections report showed a total of 473,605 tonnes of US soybeans shipped in the week ended Aug 14. 2024-25 US marketing year shipments are now at 48.867 MMT (1.795 billion bu), which is 11.6% above the same period last year and just enough to meet USDA projections for the current marketing year.

However, China has not purchased ANY new crop US soybeans yet, continuing to favor Brazil despite a US price advantage because of US-China trade/tariff tensions.

Chicago corn futures are sliding 3 to 4 cents lower this morning. The corn market ended steady to 1 to 2 cents higher on Monday.

USDA’s crop progress report on Monday rated the US corn crop as 71% good-to-excellent, one point behind last week and four points ahead of last year.

In the US Pro Farmer crop tour that started Monday…the Ohio crop was pegged at 185.69 bu/acre, up from 183.29 bu last year and the 180.47 3-year average. Yield in South Dakota was estimated at 174.18 bu/acre, which is up 17.67 bu from last year’s tour total.

Export inspections data showed 1.05 MMT of US corn shipped in the week that ended on Aug 14. 2024-25 US marketing year shipments have totaled 64.22 MMT since September 1, 28% larger year/year and should meet or exceed the USDA’s currently year-end projection.

US wheat markets are mixed to weaker this morning…Minnie spring wheat futures are trading less than a penny either side of unchanged, HRW is down 6 to 7 cents, while SRW wheat is losing 3 to 4 cents. The US wheat complex was lower across the three markets on Monday…with spring wheat losing 2 to 3 cent on the day.

Wheat futures are technically oversold but continue to grapple with rising world supply. US winter wheat is now 94% harvested. Traders are also monitoring harvest activity in Europe, Russia, and Ukraine, along with development weather in Argentina and Australia. Traders are also watching spring wheat harvest delays in parts of the northern US Plains and portions of the Canadian Prairies.

CANADIAN GRAIN MARKET

ICE canola futures continued their back-and-forth pattern on Monday, posting losses after gains on Friday. The canola market fell on the heels a Reuters report that China’s state-run trading company had purchased about 50,000 tonnes of new crop canola from Australia. If accurate, it would mark the first Chinese purchase of Australian canola since 2020 and comes after China last week slapped punitive anti-dumping duties on imports of Canadian canola.

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 Chinese anti-dumping duty of nearly 76% will make Canadian canola commercially unviable in China.

Still, canola stocks are expected to remain quite tight in 2025-26.

Chicago soyoil, European rapeseed and Malaysian palm oil were all higher yesterday.

November canola dropped $9.20 on Monday to close at $651.70/tonne, and January was down $9.40 at $663.30.

For today… canola futures are mostly down $2/tonne this morning. Nearby Nov canola is $2.90 lower at $648.80/tonne…perilously continuing to flirt with important chart support at its 200-day moving average ($649). Traders remains concerned over the lack of any progress being made on the China duty front.

Improved harvest weather for the western side of the Canadian Prairies is offsetting rain delays on the eastern Prairies…adds to selling pressure in canola.

Softening CBOT soyoil is also weighing on canola…with bean oil trading below both its 20- and 50-day moving averages and currently testing/threatening trendline support drawn off the interim low going back to March.

In other related markets…CBOT soybeans and EU rapeseed futures are slightly weaker this morning. Malaysian palm oil futures were backing off overnight…but doing so from contract highs on suspected profit taking.

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