AM Market Report – August 6, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are bouncing a modest $2 to $3/tonne higher this morning…regaining about a third or less of yesterday’s decline. Chicago are 2 to 3 cents/bu higher this morning, with soyoil higher and meal about steady.

Bean futures are drawing some support from larger-than-expected weekly US export inspections in the latest week, but the complete absence of Chinese US new crop demand for fall shipping continues to worry traders. China is normally buying US beans at this time of year. Until we see evidence that China is buying beans, it’s going to be hard for soy to rally.

Chicago corn futures are down a penny…pushing into fresh contract lows…with the Dec contract testing key psychologically support at the $4.00/bu level. Steady crop conditions and expectations of a bumper US corn harvest keeps the market mindset on ample supply prospects. Commodity brokerage StoneX projected on Monday US 2025 corn production at massive 16.323 billion bu.

US wheat markets are mixed this morning…trading a penny or two lower on the winter wheats but steady to a penny higher on spring wheat. But all US wheat markets are testing fresh contract low territory as sinking corn futures and seasonal supply pressure from Northern Hemisphere winter wheat harvests weighed on the market.

Rain has also eased some concerns over dryness affecting wheat in Western Canada, as well as in Southern Hemisphere exporters Australia and Argentina.

In Other News

– Trump levers Palestine, fentanyl – raises Canadian hackles… After raising tariffs on Canada from 25% to 35% last week, US President Donald Trump further raised Canadian ire with a post on truth social saying Canada’s support of a Palestinian state would make it difficult to make a deal. This after Trump accused Canada of not working hard enough to stem the flow of deadly fentanyl over the northern border.

Meanwhile, little by little, the costs of Trump’s tariffs are starting to show for American businesses and consumers. Until recently, companies have somewhat shielded US consumers from the full effects of the tariffs, either by rushing supplies into the country ahead of Trump’s deadlines or absorbing the levies as a cost of doing business. But with tariffs on imports from roughly 100 US trading partners due to rise this week, tariff-related costs are headed nowhere but up.

Prime Minister Mark Carney and Dominic LeBlanc, the minister responsible for Canada-US trade, expressed confidence a new trade deal will be reached with the US, even after 35% tariffs were imposed late last week on products not covered by CUSMA.

Reuters news agency is compiling examples of how major companies around the world are responding to Trump’s tariffs, such as hiking prices and issuing profit warnings.

And eroding US corporate figures don’t touch on another trend emerging in the US economy: the downturn in visits by international travellers, dramatically so from Canada. Perhaps that’s not exactly tariff-related, but Trump slamming other nations on trade by describing them as nasty, unfair and ripping off the US is not exactly what you’d call a warm and welcoming tourism ad campaign either.

Meanwhile here at home… Mark Carney said Ottawa would provide $1.2-billion in support for Canada’s softwood lumber producers to deal with the hikes in US trade duties.

– ADM Q2 profit falls to 5-year low… Trade turmoil and US biofuel policy uncertainty negatively impacted ADM profits on slowed sales and crimped trading and crop processing margins…posting its lowest second-quarter profit in five years. The company warned that full-year 2025 earnings would drop to the lowest since 2020 after a weak first half and amid ongoing challenges in global trade. ADM says it is bracing for an impact from Trump’s sweeping tariffs on most imports, as well as any trade retaliation which often targets agricultural products.

ADM and agribusiness peers, including Bunge and Cargill, have seen profits erode in recent quarters due to ample global crop supplies and thinning margins. Trump’s tariff threats and shifting deadlines for duties have fueled further chaos for the global grain merchants.

– More on the US tariffs front… President Trump said he would impose increased tariffs on countries buying energy from Russia. Trump also said he’d raise tariffs on India “very substantially over the next 24 hours,” and that levies on semiconductor and pharmaceutical imports would be announced “within the next week or so.” Trump said the US is “very close to a deal” with China to extend a trade truce, but would impose tariffs on additional countries, including China, if necessary, saying “we’ll be doing quite a bit of that.”

– Pulse exports down month-to-month… Canadian lentil, chickpea and dry pea exports were lower in June compared to the previous month, but crop year-to-date movement remains solid for pulse crops with one month left in the 2024-25 marketing year.

Statistics Canada reported 79,179 tonnes of lentils were exported in June, down from 108,281 in May. This raised the 2024-25 marketing year total from August 2024 to June 2025 to 1.772 MMT, up from 1.541 MMT one year earlier. India was the top destination through 11 months at 546,435 tonnes, followed by Turkey at 247,266 and United Arab Emirates at 204,955 tonnes. Compared to the previous year, 9.6% more lentils were shipped to India and 88.9% more were shipped to Turkey. Shipments to the UAE were relatively steady. Agriculture Canada is projecting 2024-25 lentil exports to be 2.0 MMT.

Canadian chickpea exports in June totaled 21,183 tonnes, down from the May total of 26,207. The marketing year total was at 200,602 tonnes, higher than the 183,185 tonnes reported the year before. Pakistan was the top destination through June at 49,790 tonnes, eclipsing the 3,343 tonnes shipped by the same time in 2023-24. The United States showed a small decline from the year before at 31,106 tonnes in second place, while Italy’s shipments increased 26.8% at 20,206 tonnes in third. Turkey’s shipments fell 62.3%, going from being the top destination last year to becoming fourth at 18,392 tonnes. AgCan forecasts 2024-25 chickpea exports at 190,000 tonnes.

Dry pea exports were down 48% month-by-month in June at 52,490 tonnes, which made the August to June total 2.148 MMT. One year earlier, the total dry pea exports during the same period were 2.383 MMT. While shipments to India were similar to last year at 820,620 tonnes to be the top destination, China dropped to second with a 28% decline at 720,326 tonnes (import tariffs). The total sent to Bangladesh rose by 50.7% at 209,647 tonnes. Exports to the US were cut by 36.2% at 97,597 tonnes. AgCan projects 2024-25 marketing year pea exports at 2.3 MMT for the entire year.

– Buckle up, stock market investors… Bloomberg reports “a chorus of stock market prognosticators at some of Wall Street’s biggest firms are warning clients to prepare for a pullback as sky-high equity valuations slam into souring US economic data.” Morgan Stanley, Deutsche Bank AG and Evercore ISI all warned the S&P 500 stock index is due for a near-term drop in the weeks and months ahead. These forecasts follow a strong stock-market rally from April’s lows that pushed prices to record highs last week. Morgan Stanley’s Mike Wilson sees a correction of up to 10% this quarter. Evercore’s Julian Emanuel expects a more substantial decline of as much as 15%. Deutsche Bank’s team, led by Parag Thatte, said a small drawdown in equities is overdue. History shows the months of September and October can be rocky for stock market investors.

Outside Markets

The Dow Jones Industrial Average edged down 61.90 points on Tuesday to settle at 44,111.74, while the S&P 500 Index dipped 30.75 points to 6,299.19. Early Wednesday, September Dow Jones futures are up 166 points.

US stock index futures are trending higher this morning, while European stock markets are narrowly mixed and Asian markets slightly higher. Investors are assessing weakening US economic data and corporate warnings…taking a hit from Trump tariffs amid growing US Federal Reserve interest rate cut expectations.

TSX stock futures followed sentiment higher after Canada’s main stock index closed at a fresh record high yesterday.

“We see risk assets in a tug-of-war between solid US corporate earnings, powered by the artificial intelligence theme, and tariffs hurting growth while lifting inflation,” said analysts at BlackRock Investment Institute.

The September US Dollar Index is down 0.376 at 98.205. The Canadian dollar strengthened against its US counterpart…currently quoted at 72.63 US cents.

Sept crude oil futures are up $1.20 at US $66.36/barrel. Oil prices are on the rise this morning, rebounding after a consecutive four session sell-off in response to concerns over potential supply disruptions after US President Donald Trump threatened India with higher tariffs over its Russian crude purchases.

“There’s still plenty of uncertainty over the US imposing secondary tariffs on buyers of Russian oil…market chatter is growing that China’s purchases of Russian oil may come into focus next,” ING commodity strategists said. “If India were to stop buying Russian oil amid tariff threats, we believe the market would be able to cope with the loss of this supply,” they said, adding that the bigger risk was if other buyers also started to shun Russian oil.

Grain Markets

Chicago soybean futures are starting 2 to 3 cents/bu higher this morning. On Tuesday, bean futures reverted from midsession gains to 3 to 4 cent losses by the close. Soymeal futures are less than $1/ton either side of unchanged this morning. Soyoil futures are showing 33 to 44 point gains…bouncing from yesterday’s 57 to 74 point declines.

Chartwise… Nov bean futures are up 2.75 cents this morning at $9.93/bu…finding temporary support at $9.90, but so far resistant to getting back above $10.00 after falling to its lowest level since early April. Futures are expressing oversold technical conditions, but no sense a sustained rebound is in the cards at this time.

While near-term US Midwest weather forecasts are generally crop-friendly, there are questions about longer-term outlooks as the US bean crop enters critical pod set and fill stages of development. At this time, the trade is dialing in a big 2025 US soy crop.

Chicago corn futures are slipping another penny or two lower this morning in fresh tests of new contract lows. The corn market posted losses of 4 to 5 cents on Tuesday as big crop prospects continue to weigh on futures.

Demand for US corn remains solid on all fronts…feed, export and for ethanol production. But dialing in ideas of a massive 16+ billion bu US corn crop on top of a record large Brazilian crop is all that matters to the trade today.

Chartwise… Dec corn futures trading 1.5 cents lower at $4.01/bu…looking grossly oversold on a short-term technical basis, but showing no clear sign of a bottom yet. The market is stuck in a pattern of posting lower lows and lower highs.

US winter wheat markets are tipping 1 to 2 cents lower this morning, while Minnie spring wheat future are trying to hold a penny gain. It’s marginally mixed trade early on Wednesday. The US wheat complex pushed lower across the three exchanges on Tuesday, led by the KC market, down 12 cents in the front months, CBOT futures were 8 to 10 cents lower in the front months, while Minnie spring wheat was down 2 to 4 cents yesterday.

US wheat export sales have been reasonably good, but still lacks a big buyer stepping in to really move the market. The wheat market remains unstable due to geopolitical uncertainties, abundant global supplies, and volatile weather throughout most wheat-producing countries, especially in the Black Sea region.

The USDA’s next assessment of US and world wheat production is out August 12, in the usual monthly set of supply, demand, and production numbers.

CANADIAN GRAIN MARKET

Further weakness in Chicago soyoil futures pressured ICE canola futures on Tuesday. Bean oil fell for the fourth time in five sessions yesterday, with European rapeseed also posting declines. On the other hand, Malaysian palm oil was higher, while the Canadian dollar was weaker.

Meaningful and widespread rain is forecast for the northeastern Prairies over the next week, with temperatures more moderate as well.

November canola lost $10.30 on Tuesday to close at $672.20/tonne, while January was down $9.60 at $684.20.

For today… canola futures are showing $2 to $3/tonne gains this morning, but that’s only a partial recover from yesterday’s $10/t losses. Nov canola futures are up $3.10 at $675.30/tonne after yesterday breaking to its lowest level since the start of June. Nov is trading well below its 20- and 50-day moving averages, and now testing its 100-day ($671). The line here NEEDS to hold…otherwise a head-and-shoulders top chart formation looks increasingly likely to be confirmed.

Canola is getting some support from modest CBOT soybean/soyoil gains this morning, though neither of those markets are demonstrating robust bullish tendencies at the moment. EU rapeseed futures are mixed to weaker and pressing summertime lows. Malaysian palm oil is also slightly lower, but coming off its highs price levels since February.

We’ll see if the latest President Trump blathering about giving Russia until Friday to reach a ceasefire with Ukraine…or else…carries any weight in the crude oil, and in turn vegetable oil and oilseed markets.

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