AM Market Report – August 25, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are rallying for a fourth consecutive session to start this morning, so far posting solid $8 to $10/tonne gains on the front month contracts. Nov canola futures managed a 5-day gains of $5.60/tonne last week…and is up a further $6.90/t this morning alone. Market is stabilizing following a recent steep sell-off. That said…a stronger Canadian dollar has weakened Prairie cash basis bids, and global politics (China’s anti-dumping probe, US-Canada trade shifts) keep us guessing on what comes next.

US grain markets are mixed to firmer overnight. US winter wheat futures are mostly 3 to 4 cents higher, while spring wheat futures are steady. Wheat markets are searching for a story other than increased harvest activity and lower global prices.

Chicago soybean futures are up 1 to 2 cents/bu. New crop soybeans rallied 16 cents/bu last week. The Pro Farmer crop tour showed strong pod counts, but top end yields could be threatened by disease. EPA’s decision on the 175 plus Small Refinery Exemptions also supported the bean oil market.

Chicago corn futures are 2 to 3 cents/bu this morning, and hit a four-week high overnight. The corn market rose 6 cents last week, with gains sparked by Pro Farmer’s yield estimates from Iowa and Illinois, which came in well below USDA’s August. Funds covered shorts with the idea that USDA’s 188.8 bu/acre US national average corn yield projection could be the highest of the season. The corn market also saw stellar new crop export sales posted on the week.

The weekly action may help confirm possible pre-harvest lows last week, but how much higher can corn and soybeans rally?

Last week’s Pro Farmer crop tour projected a record 16.204 million bu corn crop in 2025 after ideal weather across much of the US Midwest this summer, but the bounty will fall short of USDA’s lofty outlook (16.742 billion bu) as pockets of plant disease and heat stress dented yields in spots across the farm belt. Pro Farmer also said Friday it expected to reap a bumper 4.246 million bu US soybean crop (USDA at 4.292 billion), although dry conditions in parts of the eastern Midwest and pockets of disease pressure in Iowa may limit yield potential.

In Other News

– Canada to remove counter-tariffs on US goods amid ongoing trade war…Canada is dropping its counter-tariffs on US goods that are covered by the free-trade agreement between the two countries, amid the ongoing trade war with the United States, Prime Minister Mark Carney said Friday. Carney made the announcement during a news conference, following a virtual meeting of his cabinet, and the day after a discussion with US President Donald Trump. Canada’s counter-tariffs on US steel, aluminum, and autos are not changing, Carney said.

When asked whether he received assurances from Trump that scrapping countermeasures will kickstart negotiations on a new trade and security deal, Carney said: “yes.”

A White House official said the US welcomes the move, calling it “long overdue.” The official added they look forward to “continuing our discussions with Canada on the administration’s trade and national security concerns.”

Canada and the US have been in a protracted trade war since February, when Trump imposed sweeping tariffs on Canadian goods, claiming they were related to border security. In the months since, he’s stacked additional sectoral tariffs on steel and aluminum, copper and autos.

Products that are covered by the Canada-US-Mexico free trade agreement (CUSMA) are exempt from the initial slate of border-related levies.

Speaking to reporters on Friday, Carney insisted the move to drop some counter-tariffs is meant to “match” US levies, by implementing a carve-out for goods covered by CUSMA. But, while the American administration has imposed 50% tariffs on steel and aluminum, Canada’s counter-tariffs on those industries will remain at 25%.

The government has also implemented measures to support the industries most affected by the trade dispute, and has been working to diversify its export markets to help insulate the Canadian economy from an over-reliance on the United States.

– Mexico seems to keep winning in the Trump trade wars… As the trade war has dragged on, Mexico has seemed to benefit from a softer touch from the White House, at least compared with the mercurial President Donald Trump’s recent treatment of Canada. And while the difference reflects a number of factors unique to Mexico, experts see potential lessons for Canada…lessons which Carney, who on Friday said Canada would drop its retaliatory tariffs on US goods imported under the North American trade pact, already appears to be heeding.

What’s next: A new report by foreign policy and business leaders says Canada needs a new playbook for relations with China amid Trump chaos.

In September, Carney is set to travel to Mexico to meet Mexican President Claudia Sheinbaum as the two countries struggle with the erratic trade policies of the United States.

– Saskatchewan premier to go to China to discuss canola tariffs… Saskatchewan Premier Scott Moe said he would travel to China soon for talks on persuading Beijing to drop its new tariffs on canola. China hit Canadian canola seed imports with preliminary 75.8% duties earlier this month following a bogus anti-dumping investigation, escalating a year-long trade dispute. China is by far Canada’s biggest canola seed export market. Canada exported almost $5 billion of canola products to China in 2024, about 80% of which was seed, and the steep duties would likely all but end those Chinese imports if they are maintained.

“Myself will be in China in the next couple of weeks with potentially another opportunity for engagement before the end of the calendar year,” Moe said after a meeting with industry officials and federal Agriculture Minister Heath MacDonald. “(We will) work alongside our federal government to ensure that we are advocating and advancing to ultimately…find the resolution to this trade challenge.”

Moe also reiterated a call for federal aid for the industry. Prime Minister Mark Carney last week said Ottawa was focusing on a series of supports but did not give specific details.

– EPA rules on US refinery exemptions… The US Environmental Protection Agency (EPA) announced Friday it acted on 175 Small Refinery Exemption (SRE) petitions covering compliance years 2016–2024, seeking to clear a long-standing backlog and align policy with the US Renewable Fuel Standard (RFS). After consultation with the Department of Energy, EPA granted full exemptions to 63 petitions, partial exemptions to 77, denied 28, and found seven ineligible. The agency granted 50% relief in cases of partial hardship, moving away from earlier interpretations that would have denied aid altogether.

EPA also confirmed that compliance credits (RINs) returned through these exemptions will not affect current or future renewable fuel blending obligations, since credits from 2022 and earlier are no longer valid for 2024 compliance. In other words, refiners don’t get to dust off old, worthless credits to meet future mandates. That’s critical because it keeps the demand picture for new biofuels/RINs intact.

EPA said it will soon submit a supplemental proposed rule to the Office of Management and Budget on reallocating exempted volumes for 2023 and later years, while leaving earlier years untouched. The proposal will also outline how EPA plans to account for future exemptions when setting renewable fuel standards for 2026 and 2027. EPA emphasized that its actions are meant to balance relief for small refiners with Congress’ intent to expand the use of US biofuels, strengthen energy security, and support rural economies.

Market impact… CBOT soyoil futures swung wildly down then up on the news Friday in a 400 point trading range…ultimately settling over 100 points higher on the day as traders digested the fact that what looked like a bearish flood of compliance credits actually won’t dent future obligations.
Soyoil futures rallied sharply when it was reported that the EPA would consider reallocating the voided obligations back to large blenders and refiners.

But that will not be an easy process. If EPA wants to reallocate the exemptions back to big oil, a public comment period on the rule change will be required. It is expected that the US oil industry will vigorously fight the reallocation in court. There is no assurance that the reallocation will be successful, which leaves future US soyoil demand in statistical purgatory.

The trade sees the SRE ruling as slightly bearish for 2026-27 demand for US green fuels, but a potential bullish reaction in mid to late October if there is a reallocation of SRE waivers that were granted today. Unfortunately, the path forward in US biofuel demand will likely depend on the US court system. Often the US court system takes years to decide.

– China says rampant US protectionism threatens agricultural ties… US protectionism is undermining agricultural cooperation with China, Beijing’s ambassador to Washington said, warning that farmers should not bear the price of the trade war between the world’s two largest economies. “It goes without saying that protectionism is rampant, casting a shadow over China-US agricultural cooperation,” said Xie Feng.

Agriculture has emerged as a major point of contention between China and the US as the superpowers are locked in a tariff war launched by President Donald Trump. China in March slapped levies of up to 15% on $21 billion worth of American agricultural and food products in retaliation for sweeping US tariffs. Washington and Beijing this month extended a truce for 90 days, staving off triple-digit duties on each other’s goods.

US ag exports to China fell 53% in the first half of the year from the same period in 2024, with a 51% decline in soybeans, Xie said at a soybean industry event in Washington on Friday.

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 coming key US marketing season.

– Canadian cattle herd sees first year-over-year increase since 2021...Canadian cattle numbers rose as of July 1, the first year-over-year increase since 2021 according to new data from Statistics Canada. Canadian cattle producers had 11.9 million cattle and calves on farms as of July 1, up 0.8% from one year earlier. StatCan attributed the rise to lower slaughter, which fell 5% year over year to 1.6 million head for January to June. Producers retained 2% more beef heifers for breeding, 0.5% more bulls and 0.4% more beef cows. Dairy heifer inventories also rose by 0.5% and there were 0.4% dairy cows.

Greater retention of breeding stock and a 1.8% year-over-year increase in births from January to June supported cattle inventories.

Meanwhile, Canadian hog producers reported 13.8 million hogs on farms as of July 1, down 1.3% from a year prior. Total hog slaughter rose 3.3% year-over-year to 11.0 million head between January and June, supported by strong demand for pork exports.

– IGC raises world corn output forecast on bumper US crop... The International Grains Council has raised its forecast for 2025/26 global corn production largely reflecting an improved outlook for the crop in the United States. The inter-governmental body, in a monthly update, projected the global corn crop would reach a record 1.299 billion tonnes, up 23 MMT from its previous projection. The US corn crop was seen at 423.5 MMT, up from a previous projection of 398.9 MMT.

The IGC also said it had increased its 2025/26 world wheat crop outlook by 3 MMT to 811 MMT. Russia’s wheat crop was seen at 83.7 MMT, up from a previous projection of 81.7 MMT, while the outlook for the European Union was upgraded to 138.8 MMT from 137.2 MMT. Ukraine, however, saw a downward revision to 24.5 MMT from 25.1 MMT.

– European Union importing more corn... Europe’s scorching temperatures are curbing corn crop production, putting the European Union on track for its highest imports in three years, according to a Bloomberg report. The heat has reduced corn production prospects for both quality and yields, with the share of French corn rated in good to excellent condition falling to 62% in the week to Aug 18. Matt Darragh, a grains and oilseed analyst at Kpler, said corn from Brazil and the US is “pricing very competitively on the global market, which is encouraging import demand” and likely to support EU corn imports, said the Bloomberg report.

– Indonesia urges EU to remove countervailing duty on biodiesel after WTO ruling… Indonesia’s trade ministry urged the European Union to immediately remove countervailing duties on biodiesel imports, after the World Trade Organization backed the Southeast Asian country on several key claims in a complaint to the trade body. Indonesia brought its complaint to the WTO in 2023, alleging the EU’s imposition of duties on imports of its biodiesel broke the body’s rules.

“We urge the EU to immediately revoke these countervailing import duties that are not WTO-compliant,” said Indonesian Trade Minister Budi Santoso in a statement, after the WTO’s ruling last week. “This victory proves that the Indonesian government consistently complies with international trade rules without implementing distorting trade policies,” he added.

The EU, Indonesia’s third-largest destination for palm oil products and one of Indonesia’s major markets for biodiesel, has imposed countervailing duties of 8% to 18% since 2019, alleging Indonesian biodiesel producers benefit from grants, tax benefits and access to raw materials below market prices.

The trade ministry said the WTO panel had assessed that Indonesia’s export duty and export levy on palm oil could not be categorized as a subsidy, and that the EU Commission failed to prove a threat of material harm to European biodiesel producers caused by Indonesian biodiesel imports.

Indonesia’s palm oil-based biodiesel exports plunged to 36,000 kilolitres in 2020 from 1.32 million kilolitres in 2019. In 2024, Indonesia exported 27,000 KL of biodiesel.

The finding can be appealed, but no final ruling is possible since the WTO’s top appeals court is no longer operational. The WTO Appellate Body ceased functioning in 2019 due to repeated blockages of judge appointments by the first administration of US President Donald Trump.

– Rains boost Argentine wheat fields… Heavy rainfall in Argentina in recent days has helped farmers who are fertilizing their wheat fields for the country’s 2025/26 crop season, the Buenos Aires grains exchange said. Some 2 to 6 inches of rain fell across Argentina’s agricultural heartland in recent days, the exchange said…boosting moisture levels at a key time in the growing cycle. A top global supplier of wheat, Argentina has some 16.55 million acres of wheat fields this season. The harvest is set to begin in November.

Corn farmers have essentially harvested 95.9% of an estimated 49 MMT harvest for 2024/25, the exchange added, a day after it predicted the 2025/26 season would see a near-record planting area of some 19.3 million acres of the crop. Corn planting is set to begin next month.

Outside Markets

The Dow Jones Industrial Average surged 846.24 points higher on Friday to settle at 45,631.74, while the S&P 500 jumped 96.74 points higher to 6,466.91. Early Monday, the September Dow Jones Futures are retracing down 80 points.

Global markets are looking for direction as investors gave a cautious welcome to the likely resumption of US interest rate cuts, while hoping AI-superstar Nvidia’s results this week will help justify the tech sector’s stratospheric valuations.

Wall Street stock index futures are in negative territory this morning after Friday’s big rally higher following US Federal Reserve chairman Jerome Powell hinting at a near-term US interest rate cut during his Jackson Hole Symposium speech.

Powell’s dovish change of course has seen futures price in an 84% chance of a quarter-point US rate cut next month, and at least 100 basis points of easing to 3.25-3.5% by the middle of next year. The shift “reinforces our view that the Fed will ease in response to softening US labour demand and that risk to our forecast for a material downshift in global growth this quarter is skewed to the upside,” said Bruce Kasman, global head of economic research at JPMorgan.

TSX stock futures are following market sentiment lower this morning after Canada’s main stock market closed at another all-time high on Friday. With tariff threats and persistent inflation challenging the Canadian economy, it remains somewhat surprising that Canadian stocks have hit an all-time high…the S&P/TSX Composite closed above the 28,000 point level for the first time ever late week. The Toronto market has advanced 13.5% since the start of the year, driven by banks and resource stocks, in particular gold miners.

The September US Dollar Index is up 0.216 at 97.815. The Canadian dollar was little changed against its US counterpart…currently quoted at 72.42 US cents.

October crude oil futures are up $0.77 at US $64.43/barrel. Oil prices climbed as traders weighed concerns that Russian supply could be disrupted by more US sanctions and Ukrainian attacks targeting energy infrastructure in Russia.

“The market is somewhat concerned that these peace negotiations are going nowhere,” said Ole Hansen, head of commodity strategy at Saxo Bank. “The market is looking for supply to exceed demand in the autumn months, but in the short term that’s being challenged by a potential geopolitical disruption.”

Grain Markets

Chicago soybean futures are trading 1 to 2 cents/bu higher so far this morning. Bean futures held their gains for much of Friday’s session, as contracts closed up 2 to 3 cents across the front months. Nov beans rallied 16 cents for the week ended Friday. Nov beans are up a modest 1.5 cents this morning to $10.60/bu, but continuing an impressive 76 cent run higher since its Aug 6 contract low posting.

Soymeal futures rising this this morning, led by $4/ton gains on the front month Sep/Oct contracts. Soyoil futures are very narrowly mixed…only a couple of points either side of unchanged after jumping 120 to 146 points higher on Friday.

On Friday, the EPA granted full Small Refinery Exemptions to 63 of the 175 petitions from the 2016-2024 backlog, with another 77 partial exemptions granted. There were 28 petitions denied and 7 listed as ineligible.

The Friday afternoon Commitment of Traders report showed the spec fund crowd in soybean futures flipping to a net long of just 3 contracts as of August 19. That was a move of 35,273 contracts from the previous net short.

Following the US Midwest crop tour last week, Pro Farmer estimated the 2025 US soybean national yield at a record 53 bu/acre. Production was estimated at 4.246 billion bu (low acres). That comes in below the 53.6 bu/acre and 4.292 billion bu reported by USDA last week.

Crop weather expected to end August will bring rain this week to Kansas and the US Delta regions. Additionally, rain is forecast toward the end of the week in Iowa and eastward, which will further fill soybean pods. Cooler temperatures will persist into September.

Traders remain concerns over the lack of Chinese buying interest in US soybeans, which usually starts rising in August. Beijing is absent, at least officially, from the US market because of tariff tensions. Unknown destinations have been buying a large amount of new crop US beans, but those could get canceled or it might not be China at all.

Chicago corn futures are up 2 to 3 cents this morning. The corn market closed out Friday’s session with mixed action, as nearbys were within a penny of unchanged…though Dec corn gained 6 cents on the week.

After last week’s Pro Farmer crop tour showed most states’ yield above last year, with the 2025 national yield at 182.7 bu/acre and production at 16.204 billion bu. That is down from 188.8 bu/acre and 16.742 billion bu from USDA’s August crop production report. Concerns are being expressed about widespread crop diseases that could worsen before harvest.

CFTC data showed speculators in corn futures cutting 31,464 contracts from their net short position as of August 19 to a net short of 144,650 contracts.

Corn futures are rising off early month contract lows thanks to robust export demand amid competitive US pricing, and doubts over USDA’s lofty yield target. Disease pressures and early crop maturity add further uncertainty ahead of USDA’s next supply/demand report (Sept 12). For now, global supply is building, but US demand momentum is helping the market stay supported.

US wheat markets are slightly higher this morning… Minnie spring wheat futures are steady to 3 cents higher, HRW rising 2 cents, while SRW wheat is 3 to 4 cents higher. The US wheat complex rounded out the week with losses across much of the market, with nearby spring wheat an exception…spring wheat futures closed Friday’s session steady to a penny higher, though still laboring near contract lows.

Demand for US wheat has been solid. USDA’s latest export sales total from Thursday shows the total US wheat commitments at 11.566 MMT, which is the largest for the current week going back to 2013/14. That is also 49% of the USDA export projection for the entire marketing year. Cheap wheat has been selling…but needs to keep selling to tighten up supply.

The wheat market remains pressured by harvest activity that is advancing quickly and lower prices worldwide.

Improving conditions are raising Canadian yield expectations, with the 2025 non-durum crop potentially reaching over 31 MMT. The quality of the harvest will be watched closely.

USDA showed US hard red spring wheat area slipped to just 9.4 million acres in 2025. Yields are expected to be good, although there are questions about quality due to recent rains.

Australia and Argentina have received favorable moisture through most regions, setting up for large Southern Hemisphere production this winter.

Wheat stocks across the major exporters are forecast to decline slightly in 2025-26 to the lowest level in five years. But near-term supplies are adequate to meet expected demand. World wheat prices have settled into a sideways pattern as the Northern Hemisphere harvest gets into the later stages, and with few production surprises this season.

Wheat prices have been declining in Western Canada, which is typical through the summer. Most years show a seasonal low in September, followed by some post-harvest recovery.

Traders are watching the stalled peace talks between Russia and Ukraine. Global grain trade remains uncertain without a resolution to the war. So far, no date has been set for these two warring nations to meet. Quite frankly, I don’t think Putin really wants an end to the conflict.

CANADIAN GRAIN MARKET

ICE canola futures closed higher for the third straight session on Friday, with strength in Chicago soyoil spilling over to provide support.

US government issuing a ruling on requests by small oil refiners for US biofuel exemptions sent bean oil to sharp gains on Thursday, with further advances again Friday after some wild whipsaw price action. There are ideas the ruling could reallocate US biofuel obligations to larger refiners, thus sustaining demand for biofuel.

Soybeans were also higher on Friday amid strong soyoil pricing, a positive weekly US export sales report from the USDA on Thursday and hopes that China will soon return to buying American beans (though that’s debatable).

November canola gained $3.20 on Friday to settle at $666.50/tonne, and January was up $3.10 at $677.50.

For today… canola futures are trading higher for a fourth consecutive session to start this morning, so far posting solid $8 to $10/tonne gains on the front month contracts. Nov canola is up $10 this morning at $676.50/tonne…a nice bump above what had been short-term chart resistance at $660 and this morning edging back above its 20-day moving average ($671). Overhead trendline resistance draw off the June high and the 100-day average reside near $680.

Our canola market appears to be stabilizing following a recent steep sell-off on the China canola tariff news (76% levy on seed). That said…a stronger Canadian dollar has weakened Prairie cash basis bids, and global politics (China’s anti-dumping probe, US-Canada trade shifts) keep us guessing on what comes next. There is talk of Chinese negotiators heading to Canada in the coming…could a truce be struck vis-a-vis electric vehicle tariffs in exchange for canola relief? But that’s seems more hope than near-term reality.

But canola pricing futures remains highly tied to CBOT soyoil which has bounced notably in the past couple of sessions on EPA announcements on biofuel policy. The vegoil demand picture looks better, but still plenty of uncertainty on US biofuel policy persists.

Seems hard to think canola pricing can sustain a rally near-term amid persistent tariff worries and the Prairie harvest season gearing. But a further post harvest bounce seems quite possible after initial harvest pressure subsides…as what usually happens in this market…unless geo-politics further interferes.

I’m not interested in being a seller of cash canola at this time. Suggest the focus should be on harvest at this time. In the spring, it took four weeks to recover completely from the $85/tonne initial price break on the surprising announcement of 100% tariffs on Canadian canola oil and meal imports into China…and just five weeks to set new highs for the year. Will that happen again? Too soon to tell; but given the break was only $35/t this time, with much of that already recovered, there appears to be no reason to panic while waiting to see.

On the feed grains… The cereal harvest in Saskatchewan isn’t in full swing yet, but feed barley still has a discounted price advantage over the valued imported US corn landed in Western Canadian feedlots.

Late-season ratings for barley crops in Alberta and Saskatchewan are above average and suggest strong yields for 2025. Despite a 4% decline in seeded area, yields 5% above the average would result in an 8.2 MMT Canadian barley crop for 2025, slightly larger than last year.

Cattle sales at the auctions are ramping up this month, and with the ongoing contraction of the national cattle herd, feed pricing will likely remain stalled during the barley harvest.

The cattle producer also has good grass conditions with these recent rains, so no sense the feed user will be a panicked buyer. Feed grain prices are still looking to bottom out, but movement will be gradual, with feed prices still pressured for now.

Delivered bids for Saskatchewan feed barley ranged from $4.50 to $4.80/bu, down 46 cents from last month. In Alberta, bids were down 44 cents at $4.50 to $6.21/bu (depending on region), while in Manitoba, barley dropped 78 cents in the past month to $4.25 to $4.57/bu.

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