GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS
OVERNIGHT GRAIN TRADE
ICE canola futures are building on yesterday’s gains, adding another $5 to $6/tonne higher bounce so far this morning. Not suggestive of a summer bottom yet, but managing to maintain chart support at its 200-day moving average. Chicago soybeans are up 2 to 3 cents/bu this morning, with soyoil also rising, though meal is slightly weaker.
Chicago corn futures are up 2 cents this morning. The corn market seems to be building a price base under the market…halting wat has been a parade to contract lows this summer.
US wheat market is finally showing at least some bullish mettle this morning… Minnie spring wheat futures are rising 3 to 5 cents, HRW up 3 to 4 cents and SRW wheat 4 cents higher. Wheat has been a long and grinding bear market…hopefully giving the initial flashes of stability. But wheat prices remain near a five-year low, pressured by ample global supply amid rising expectations for Russia’s 2025 wheat crop. So we certainly need to see much more robust follow-through buying interest before market bulls even have a chance of showing more confidence.
Grain traders continue to monitor results coming from this week’s Pro Farmer US Midwest crop tour, which continues today, and has initially confirmed strong US corn and soybean yield prospects. What they’re seeing seems to be falling in line with what the USDA has put out there.
US crop weather still seen as mostly favorable. World Weather Inc. reports “conditions in most of the key US crop areas east of the Rocky Mountains will continue to be favorable through at least the next 10 days.” The northern US Plains and Corn Belt are unlikely to receive much rain in this timeframe. However, “this shouldn’t be problematic due to below average temperatures that will limit evaporation rates.”
In Other News
– US Pro Farmer Crop Tour: Iowa and Illinois… Corn yield potential and soybean prospects are significantly above average across Illinois and western Iowa, though plant diseases could threaten final yields, scouts on an annual crop tour of the US Midwest said on Wednesday. The four-day Pro Farmer crop tour, which started on Monday and covered seven major US corn and soybean states, found strong production potential so far.
The tour, which does not project US soybean yields, estimated the number of soybean pods in a 3-by-3-foot square in Illinois, the top soy-producing state, at an average of 1,479.22, above last year’s tour average of 1,419.11 pods and the highest in tour records. The tour projected the Illinois corn yield at 199.57 bu/acre (bpa), down from 204.14 bpa in 2024, but the second-highest on tour records.
In Iowa’s western third, the tour’s corn yield forecasts and soybean pod counts were well above the three-year averages. It will release full statewide figures for Iowa on Thursday. Timely rains benefited crops in western Iowa but also promoted the growth of fungal diseases such as southern rust in corn and sudden death syndrome in soybeans, which tend to lower crop yields. The extent of any impact of diseases on yields won’t be fully known until crops are closer to harvest, but some effects may emerge sooner.
– Sask Premier wants the PM to join trade mission to China… Saskatchewan Premier Scott Moe has spoken privately with Prime Minister Mark Carney about the importance of re-establishing normal agricultural trade with China. The Chinese government imposed a 75.8% duty on Canadian canola seed imports last week. Earlier this year, China placed 100% tariffs on canola oil, canola meal and peas.
The Chinese government is upset about Canadian tariffs (100%) on electric vehicles, steel and aluminum, and many believe the tariffs on canola and peas were implemented as a retaliatory measure.
The Chinese government has not issued an official invitation for a Canadian delegation, but Moe notes that former German Chancellor Angela Merkl made many “unofficial” visits to China to build trade ties, so it is not a unique concept. He says Saskatchewan can play a supporting role through its trade office in China.
Moe is meeting in Saskatoon today with Federal Agriculture Minister Heath MacDonald and Cody Blois, Parliamentary Secretary to the Prime Minister, along with representatives from the canola sector. The focus: responding to China’s steep tariffs on Canadian canola products.
– China launches WTO dispute with Canada on steel and aluminum surtaxes…China has requested dispute consultations at the World Trade Organization regarding Canadian surtaxes and quotas on steel and aluminum goods, the WTO said on Wednesday. The disputed measures include a surtax in the form of tariff rate quotas on certain steel imports originating from Canada’s non-free trade agreement partners, including China, a notice from the WTO said. China is also challenging a surtax on certain goods that contain steel or aluminium originating from China, it added.
– Argentine rains seen boosting corn planting area… Argentina’s corn planting area is expected to span some 19.3 million acres this 2025/26 season, the Buenos Aires Grains Exchange said, up 9.6% from the area that was planted for the current season thanks to abundant rains. If planted, this will be Argentina’s second-largest area ever planted to corn, after the 20.75 million acres recorded in 2023/24. Corn planting is set to begin in September. The exchange estimates that Argentina, the world’s third-largest corn exporter, produced some 49 MMT in 2024/25.
– India snaps up steeply discounted palm oil from Colombia, Guatemala…Indian importers for the first time bought palm oil from Colombia and Guatemala as producers sitting on surplus stocks offered cargoes at steep discounts. Indonesia and Malaysia dominate global palm oil supplies and are the main suppliers to India, which imported 9 MMT of palm oil in 2023/24.
Colombia and Guatemala, the fourth- and sixth-largest producers of palm oil, usually export their surplus stocks to Europe and North America. Rising production in the two Latin American countries and their ability to divert their supplies could weigh on benchmark Malaysian palm oil futures.
Colombian and Guatemalan cargoes were offered at steep discounts on a free-on-board (FOB) basis to ensure their landed cost at Indian ports remained lower than supplies from Malaysia and Indonesia, said a Mumbai-based dealer at a global trading house. Indian buyers prefer quick shipments, and the shipping time from South America is about 45 days, but the discounts were enough to lure them. The landed cost of South American palm oil at Indian ports was more than $10/tonne lower than supplies from Indonesia and Malaysia.
Outside Markets
The Dow Jones Industrial Average ticked up 16.04 points on Wednesday to settle at 44,938.31, but the S&P 500 finished 15.59 points lower at 6,395.78. Early Thursday, the September Dow Jones Futures are down 165 points.
Global stock markets are lower this morning as investors braced for potentially market-moving news from the US Federal Reserve’s annual symposium in Jackson Hole, Wyo. Central bankers from around the world are attending the event, which begins later today, with the key focus on Fed chair Jerome Powell’s speech tomorrow as traders try to gauge the chances of a September US interest rate cut.
Wall Street stock index futures are in negative territory after investors continued a rotation out of tech stocks yesterday. TSX futures followed sentiment lower after Canada’s main stock index closed up yesterday.
The September US Dollar Index is up 0.140 at 98.220. The Canadian dollar weakened against its US counterpart…currently quoted at 72.06 US cents.
October crude oil futures are up $0.06 at US $62.77/barrel. Oil prices are up slightly this morning, supported by signs of strong demand in the US, with uncertainty over efforts to end the war in Ukraine also lending support.
Grain Markets
Chicago soybean futures are trading 2 to 3 cents/bu higher this morning. Bean futures slipped back off midday strength, but still managed to finish Wednesday with modest gains 1 to 2 cent gains. Soymeal futures are mostly down around $1/ton this morning, but have been trending higher since the start of the month to a 2-month high now. Soyoil futures are up 23 to 37 points this morning…but conversely to meal having trending weaker in August, down off the late July contract highs and now filling the bullish chart gap left in June.
USDA this morning reported old crop US soybean export sales cancellations of 5,700 tonnes for the week ended Aug 14, which was about expected by the trade. Note the US soybean marketing year ends Aug 31, so new export sales have shifted to the 2025-26 US marketing year which begins Sept 1. USDA reported new crop US soy sales for this same week at a robust 1.143 MMT, which came in above the highest trade guess. Still zero buying from China though, which is a developing trade worry.
The third day of the US Pro Farmer Crop Tour showed better than average soybean yield potential in Illinois and western Iowa…continuing to suggest strong crop potential. However, this crop is not fully made yet and weather will have to remain nearly ideal to meet the USDA’s projected record yield.
Aside from the crop’s season-ending weather, big crop estimates, geopolitical uncertainties, and a stronger US dollar, traders are waiting for the next shoe to drop. The EPA’s announcement regarding small refinery exemptions for US renewable fuel volumes may be released this week. It will determine US biofuel production adjustments, especially for ethanol and bio/renewable diesel.
Chicago corn futures are between 2 and 3 cents higher this morning. The corn market slipped off the intraday highs on Wednesday, though still closed with fractional to 2 cent gains across the front months.
Day 3 of the annual US Pro Farmer crop tour showed an Illinois corn yield average estimated at 199.57 bu/acre, down from last year’s tour record of 204.14 bu, though above the 3-year average of 196.19 bpa. Yield in the western 3 districts of Iowa was above last year and the three year average.
Demand is what is holding up this market. USDA this morning reported old crop US corn export sales cancellations of 27,100 tonnes for the week ended Aug 14, which was about expected by the trade. Note the US corn marketing year ends Aug 31, so new export sales have shifted to the 2025-26 US marketing year which begins Sept 1. USDA reported new crop US corn sales for this same week at a very strong 2.860 MMT, which catapulted above trade ideas which ranged between 0.9 to 2 MMT.
EIA data from Wednesday morning showed a total of 1.072 million barrels per day of US ethanol production in the week of Aug 15, which was down 21,000 bpd from the week prior and a 12 week low. Ethanol stocks were up 39,000 barrels to 22.688 million barrels.
US wheat markets are finally seeing some positive lift this morning in what has been a perpetual bear market. Minnie spring wheat futures are up 3 to 5 cents, HRW gaining 3 to 4 cents and SRW wheat up 4 cents. The wheat complex saw some strength on Wednesday…with spring wheat edging up 1 to 2 cents.
But any significant price upside will probably be limited for now by growing world supply. North American wheat prices are competitive on the world market. USDA this morning reported US wheat export sales of 519,800 tonnes (dominated by HRW) for the week ended Aug 14, though nearer the lower end of trade expectations for this latest week.
Quality could be an issue for part of the spring wheat crop after rain-related harvest delays in the northern US Plains and eastern side of the Canadian Prairies. The complex is also watching harvest activity in Europe, Russia, and Ukraine, along with development weather in Argentina and Australia.
CANADIAN GRAIN MARKET
ICE canola futures gained some traction on Wednesday, correcting higher after two sessions of losses. Good weather across the Prairies has continued to weigh on values. Rains in August may have averted what was likely a below average canola crop.
Trading yesterday also overcame pressure from China’s tariffs on Canadian canola seed, oil and meal.
Support for canola came from gains in Chicago soybeans and soymeal, but soyoil was weaker. There were small upticks in Malaysian palm oil, while European rapeseed was mixed. Increases in crude oil spilled over into the vegetable oils.
For today… canola futures are trending $5 to $6/tonne higher on the three front month contracts this morning, adding to yesterday’s $3 gains. Nov canola is up $6.70 at $655.80/tonne…not suggestive of a summer bottom yet, but managing to maintain key chart support at its 200-day moving average. That’s a start.
Interesting to note yesterday, Agriculture Canada updated its Canadian crop production estimates based on their Canadian Crop Yield Forecast models and CGC statistics, both based on July 31 data. The most noteworthy was a dramatic 2.3 MMT increase in projected 2025 canola production to 20.1 MMT thanks to an average yield increase from 37.1 bu/acre to 41.9 bu/acre nationally. They peg new crop year ending stocks at 2.2 MMT. Markets have not shown much reaction though.
The trade remains concerned about the canola trade relationship with China given the heavy-handed import tariffs employed of late. With business to China curtailed for the time being, the canola industry must quickly shift demand focus to other export markets in creative fashion, and continue the demand build-out domestic crush processing. It’s a tall task, but doable.
Rising CBOT soybean and soyoil markets are lending our canola market some support this morning. Bean oil price action is on the radar given the break this month down from the July contract highs…and now test down into the bullish chart gap higher in June. Technical support on the price chart needs to hold here…in the 51 to 52 cents/lbs area basis the Dec bean oil contract.
EU rapeseed futures are holding about steady this morning, while Malaysian palm oil traded lower overnight.
To access the latest futures prices, go to https://www.producer.com/markets-futures-prices/
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