AM Market Report – July 21, 2025 | The Western Producer

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are trending $10/tonne lower to start Monday morning after the nearby Nov contract posted a $17.60/tonne gain last week. Chicago soybeans are experiencing some corrective selling pressure this morning…down 5 to 7 cents/bu. Soyoil rallied last week, but Friday into this morning seems to have hit chart resistance from profit-taking in the energy sector.

Chicago corn futures are also slightly weaker, losing 2 cents this morning, following good rebound gains scored late last week. Corn futures finished last week trading higher for the sixth session out of eight in a rebound off contract lows.

US wheat markets started weaker overnight but are starting to edge higher now…winter wheats posting 2 to 3 cent gains, while spring wheat futures are a penny either side of unchanged. The 2025 US Wheat Quality Council’s Hard Spring Wheat and Durum Tour starts Tuesday.

US grain markets finished strong Friday, after moving on from built-in bearish US crop weather and focusing on new outlooks of a possible heat dome for the Midwest in the last week of July.

In updated forecasts this morning, World Weather Inc. reported rainfall in the coming week “will be frequent and abundant enough to bolster or maintain soil moisture across the northern US Plains, northern and eastern Midwest and from portions of the Tennessee River Basin into the southeastern states.” Temperatures this week “will be very warm to hot from the central through the southern Plains,” said the forecaster. A high-pressure ridge is expected over the next couple of weeks in the central parts of the US, “although it will be of weak amplitude and probably will not have much negative impact on summer crops except in the central and southern Plains,” said World Weather.

Corn and soybeans hit resistance at chart gap areas during Friday’s rally and will need larger weather concerns to push past these areas. If they do, could a bottom be in place?

Trade focus also remains Trump tariff threats and his ridiculous trade war with the world.

In Other News

– Saskatchewan crop conditions mostly weaker… The condition of most Saskatchewan crops has weakened from two weeks ago. Thursday’s provincial crop report said producers in the southwest region, along with some areas in the northwest, are reporting moderate to severe crop damage due to lack of moisture. Meanwhile, minor to moderate crop damage due to dry conditions, heat and wind is being reported in many areas of the province.

The chickpea crop saw the sharpest two-week decline, dropping 13 points from June 30 to 59% good to excellent as of last Monday (June 14). The condition of the oat crop was down 7 points to 65% good to excellent, with barley and soybeans both down 6 points at 58% and 85% good to excellent, respectively.

The condition of the spring wheat and durum crops fell 3 and 2 points, down to 63% and 45% good to excellent, while the mustard and canary crops eased 3 points and 1 point to 35% and 73%. The condition of the canola crop held unchanged from two weeks earlier at 60% good to excellent.

On the other hand, the condition of the flax crop improved 3 points to 68%, lentils jumped 9 points to 68%, and peas climbed 4 points to 73%.

While crop conditions vary across the province, “crops overall are reported to be in good to fair condition,” the report said. But in areas with a lack of moisture, reports indicate that canola and mustard are finishing the flowering stage early.

Cropland topsoil moisture across the province was rated 60% adequate, 32% short and 8% very short as of last Monday, versus rated 55% adequate, 33% short, and 12% very short the previous week.

– Alberta crop conditions inching higher… Alberta crop conditions are mostly steady to higher compared to one and two weeks ago. The weekly Alberta crop report on Friday pegged the overall condition of major crops in the province (spring wheat, oats, barley, canola, and peas) at 66% good to excellent as of Tuesday (July 15). That is up a single point from a week earlier and above the five- and 10-year averages of 62% and 63% good to excellent.

The canola crop was rated 64% good to excellent as of last Tuesday, steady from a week earlier and up 6 points from June 30. At 67% good to excellent, the condition of the spring wheat crop was up 1 point on the week, and 5 points higher compared to June 30, while the oat and barley crops, at 63% and 67%, were unchanged from the prior week but up from 60% and 63% on June 30. The pea crop was rated 65% good to excellent as of Tuesday, up 3 points on the week, and up 5 points from June 30.

The lentil crop was rated 66% good to excellent as of Tuesday, chickpeas 56%, mustard 67% and flax at 72%, all marginally higher compared to June 30.

Most areas in the province’s Central Region received timely and abundant moisture this past week, while parts of the South Region experienced rainfall later in the week. However, the North East, North West, and Peace regions have reported dryness and heat stress in many areas, the report said.

By region, the condition of all crops is the strongest in the Central Region at 87% good to excellent, followed by the North West at 80%, the North East at 68%, the South at 61% and the Peace at 28%.

Moisture conditions across the province remain variable. While the South and Central regions benefited from rainfall the past week ended July 15, most areas in the North East, and North West regions are experiencing dry conditions and declining moisture reserves despite occasional light showers of rain. With limited surface and sub-surface moisture in these drier regions, “crops are showing signs of heat stress, raising concerns about reduced yields and highlighting the need for additional rainfall to support potential crop yields and encourage pasture growth.”

Provincial crop development is ahead of average, with spring cereals nearing full flowering, compared to the historical average of late head emergence. Approximately 74% of broadleaf crops are in the flowering stage, and 20% have begun podding.

Provincial surface soil moisture was rated 53% good to excellent as of last Tuesday, down 3 points on the week and below the five- and 10-year averages of 57% and 58%.

– Premiers meet with Carney on trade and nation building… Provincial and territorial leaders will gather in Ontario cottage country this week with a focus on Canada’s response to US President Donald Trump’s tariff threats. It will be the first sit down with Prime Minister Mark Carney and the premiers since Trump threatened to impose an extra 35% tariffs on Canadian goods.

Today, ahead of the formal start of their meeting, the premiers will hold discussions with national Indigenous organizations and provincial chiefs, some of whom Carney met last week to discuss the implementation of new legislation to fast-track major national projects. Indigenous leaders are concerned that the bill, known as Bill C-5, will circumvent their rights.

The Premiers will then gather over the next three days, until July 23. The meeting will take place at the Deerhurst Resort in Huntsville, Ont. Meanwhile, Trump’s new date for a new trade and security pact with Canada is Aug. 1, after he had pushed back a July 21 deadline.

– Canada eyes Mercosur trade pact to reduce US reliance… Canada’s International Trade Minister says there is interest from both sides to advance trade talks with South American bloc Mercosur, as Ottawa seeks new deals in a push to diversify from the US. Prime Minister Mark Carney and his team have been locked in talks with US President Donald Trump to hash out a trade deal by August 1, which could help reduce tariffs on Canada. But his government is also preparing to rely less on a relationship that generated bilateral trade of over $1 trillion last year and to focus on diversifying trade by signing free trade pacts globally.

“I had conversations with the foreign minister of Brazil, and there is appetite to carry out conversations around Mercosur,” Minister Maninder Sidhu said in an interview with Reuters. Mercosur…which includes Brazil, Argentina, Paraguay and Uruguay…has had negotiation rounds for a trade deal with Canada in the past.

Canada is also keen to continue talks with China to address trade challenges and views a thawing of relations between India and Canada as an important step to support trade, the Minister said. “With China, there are opportunities, there are challenges,” he said, adding that the countries are holding frank discussions on a path forward on trade tariffs around exports of canola, beef, pet food and many other products.

Canada has 15 free-trade deals covering 51 countries, giving it access to 1.5 billion consumers and Sidhu said that Ottawa will be pursuing more such deals in the coming months without giving a specific target.

– Agriculture ministers agree to AgriStability changes… Agriculture ministers have agreed to work on improving AgriStability for the 2025 program year by increasing the compensation rate and payment cap. The federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million. However, provinces have to agree in order for the changes to occur.

Federal minister Heath MacDonald said after a July 17 virtual meeting ministers were “receptive” to this plan and agreed to take the steps required to make the changes. Under the federal-provincial agreement, changes to AgriStability can only be made if two-thirds of provinces agree. The changes are meant to help with trade challenges Canadian farmers are currently facing, particularly from China and the United States.

– IGC maintains 2025/26 world corn and wheat crop forecasts… The International Grains Council on Thursday maintained its forecast for 2025/26 global corn production with a slightly improved outlook for crops in the United States offset by downward revisions for Hungary and Romania. In its monthly update, the IGC forecast the global corn crop at 1.276 billion tonnes, up from the previous season’s 1.228 billion, but broadly in line with consumption which was seen at 1.272 billion.

US corn production was upwardly revised to 398.9 MMT from 397.4 MMT seen previously, while the outlook was cut for Hungary, to 4.8 MMT from 5.9 MMT, and for Romania, to 7.7 MMT from 8.5 MMT.

The IGC also kept its 2025/26 world wheat crop outlook at 808 MMT, a modest increase on the prior season’s 800 MMT, but still slightly below projected consumption of 814 MMT.

– China’s June soybean imports from Brazil climb… China’s soybean imports from Brazil in June climbed by 9.2% from a year earlier, customs data showed on Sunday, driven by a strong harvest and the ongoing Sino-US trade war, while supplies from the United States rose 21%. The world’s biggest soybean buyer imported 10.62 MMT of the oilseed from Brazil last month, or 86.6% of the total imports, compared with 9.72 MMT a year earlier. June arrivals from the US reached 1.58 MMT, or about 12.9% of the total for the month, up from 1.31 MMT a year earlier. China’s soybean imports hit the highest level ever for the month of June to 12.26 MMT.

For January-June, China’s imports from Brazil totalled 31.86 MMT, down 7.5% compared with the same period last year. Total arrivals from the US in the first half of the year came to 16.15 MMT, up 33% on the prior year.

China’s soybean arrivals are likely to stay elevated in the third quarter, while fourth-quarter imports will hinge on the outcome of US-China trade talks.

– France faces another tough wheat export year… France could struggle to sell a much bigger wheat crop expected this year as export options for the European Union’s top wheat producer have narrowed due to less demand from Algeria and China as well as strong competition from cheaper Black Sea grain. Sparse overseas demand could lead France to stock hefty amounts of wheat or offload more crop in livestock feed markets. Either outcome could keep prices below production costs, a trend that has fuelled farmer protests in the past year.

Farm office FranceAgriMer last week projected French soft wheat exports outside the EU in 2025/26 at a relatively modest 7.5 MMT, contributing to a forecast 21-year high for end-of-season stocks. Sales to Algeria and China, among France’s biggest wheat buyers in recent years, stalled last season due to a diplomatic fallout between Paris and Algiers and a general drop in Chinese imports amid hefty domestic supply.

Like France, Germany and Poland may struggle a well. Russia, Ukraine, Romania and Bulgaria are likely to dominate wheat exports in coming months.

– Russian fertilizer plans to raise market share…Russian fertilizer producers are expected to raise their global market share to 25% by 2030, up from 20%, despite an EU ban on Russian imports, as they pivot sales to BRICS nations, the head of the industry lobby told President Vladimir Putin on Thursday. The European Union has imposed new tariffs on Russian fertilizers, which took effect on July 1 and will rise to a prohibitive level over three years. Russia previously accounted for 25% of the EU’s fertilizer imports.

“We are not afraid of any duties or tariffs. The market is large. The main thing is that we are moving specifically to the BRICS countries’ market,” Andrei Guryev, head of the Russian Fertilizer Producers Association, told Putin. “Today, the BRICS market accounts for almost 50% of all mineral fertilizer consumption, and it is a market that will continue to grow.”

Guryev said that Russia, the world’s largest fertilizer exporter, will produce 65 MMT of mineral fertilizers in 2025. He also noted that exports to India have grown four-fold in recent years.

– Bangladesh signs US wheat import deal… Bangladesh signed a deal on Sunday to import 700,000 tonnes of US wheat annually over the next five years, in a Trump administration shakedown aimed at securing tariff relief amid growing trade tensions with the United States. The agreement…formalized through a memorandum of understanding (so not really a formal agreement…comes at a critical moment, with Washington set to impose a 35% tariff on Bangladeshi exports from August 1.

Bangladesh imports around 7 MMT of wheat each year, with the bulk sourced from the Black Sea region due to its lower cost. Smaller volumes of higher-quality wheat are also imported for blending.

– Canada’s steel import duties violate WTO rules… The Chinese embassy in Ottawa criticized duties slapped by Canada last week on Chinese imported steel, saying they violated World Trade Organization (WTO) rules and disrupted the global trade order. The embassy statement followed an agreement between Canada and China in June to improve bilateral ties and take initial steps to rebuild their fraught trade relationship.

Prime Minister Mark Carney said on Wednesday that Canada would implement 25% tariffs on steel imports from all countries containing steel melted and poured in China before the end of July. Carney is trying to protect the Canadian steel industry, which had complained other countries were dumping cheap steel in Canada as a result of the 50% US tariffs on imported steel imposed by President Donald Trump.

China was Canada’s second largest trade partner last year, but their ties have frayed.

Last year Canada imposed 100% tariffs on imports of Chinese electric vehicles. In March, in retaliation, Beijing announced tariffs on over $2.6 billion worth of Canadian agricultural and food products. China is also conducting an antidumping investigation on Canadian canola seed, and had expected to issue results of the investigation by September. The embassy said the investigation could be extended for six months under special circumstances. “If Canada cancels its discriminatory tariff measures against China, China’s countermeasures can also be adjusted, suspended or canceled according to procedures,” the embassy said.

Outside Markets

The Dow Jones Industrial Average finished 142.30 points lower on Friday, settling at 44,342.19, while the S&P 500 Index edged down 0.57 to 6,296.79. Early Monday, September Dow Jones futures are up 81 points.

Global markets are mixed to start this morning… US stock index futures are higher, while European stock markets are down slightly. Canada’s TSX stock index futures followed US sentiment higher.

Investors shrugged off the Japanese ruling coalition’s defeat in upper house weekend elections and turned to focus on this week’s US tech earnings and European Central Bank policy meeting.

In Japan, the ruling coalition lost control of the upper house in an election on Sunday, further weakening Prime Minister Shigeru Ishiba’s grip on power as a tariff deadline with the US looms. “In terms of negotiations with the US, it is easy to doubt whether a government with such a weak foundation is reliable as a negotiating partner,” said Nissay Research Institute chief.

The September US Dollar Index is down 0.393 at 97.805. The Canadian dollar strengthened against its US counterpart…currently quoted at 73.10 US cents.

Sept crude oil futures are down $0.28 at US $65.77/barrel. Oil prices are dipping slightly this morning, with the latest European sanctions on Russian oil expected to have minimal impact on supplies, while US tariffs ensure broader based demand concerns remain.

“The latest round of EU sanctions aren’t necessarily going to change the oil balance. That’s why the market is not reacting much,” said Harry Tchiliguirian at Onyx Capital Group. “Russians have been very good at circumventing these kinds of sanctions.”

Grain Markets

Chicago soybean futures are trading 5 to 7 cents/bu lower this morning, giving back Friday’s 6 to 9 cent gains. While Nov beans are down 7 cents this morning at $10.29/bu, it did rally 28 cents higher last week and holding within a cluster of its 20-, 50-, 100- and 200-day moving averages in the $10.24 to $10.35 area.

Soymeal futures are narrowly mixed this morning. Soyoil futures are down 34 to 39 points, after losing 40 to 42 points lower in the front months on Friday…though still up 200 points last week.

Following some weekend rains across the US Midwest, forecasts continue to call for totals near an inch over parts of the eastern Corn Belt later in the week. The Dakotas, Minnesota, Wisconsin and northern Iowa are expected to receive 1-2 and, in some cases, up to 4 inches in the early part of this week. The 6-10 and 8-14 day outlooks are still looking for high odds of above normal temps. Still generally favorable soy growing conditions.

Spec traders in Chicago soybean futures shifted to a more bearish attitude in the week that ended on July 15, adding 26,062 contracts to their net short position to 32,278 contracts. Though that position may have shifted back in the week since last Tuesday as bean futures rebounded.

US soybean export commitments are now at 50.648 MMT, which is now 100% of USDA’s full marketing year projection. But as it pertains to new crop export demand…traders are a tad more nervous. There’s been more talk, but no confirmation, of China showing some interest in new crop US soybeans. That might not show up until August, if at all, because of Brazil’s current market dominance and China’s current tariff tensions with the US.

Chicago corn futures are trading 2 cents lower this morning. The corn market closed Friday’s session with contracts up 6 to 7 cents across most front months. Dec corn was up 15.5 cents on the week, but down 2.75 cents this morning at $4.25/bu.

Following some weekend rains across the US Corn Belt, forecasts continue to call for totals near an inch over parts of the eastern Corn Belt later in the week. The Dakotas, MN, WI, and northern Iowa are expected to receive 1-2, and in some cases up to 4 inches in the early part of this week. USDA’s weekly crop progress report out later this afternoon is expected to show improving US corn crop good/excellent condition ratings. That’s weighing on the market this morning.

Commitment of Traders data showed managed money covering some shorts in the week ending on July 15, with their net short down 29,106 contracts to 174,755 contracts.

US corn export sales data has both shipped and unshipped old crop sales at 69.467 MMT, which is 99% of the current USDA forecast for the 2024-25 marketing year.

US wheat markets are narrowly mixed to slightly higher this morning… Minnie spring wheat futures are a penny either side of unchanged, HRW is up 3 cents, while SRW wheat is 2 cents higher.

Wheat is starting the fresh week with gains across most winter wheat contracts, with spring wheat meekly trailing. The winter wheat market was in rally mode on Friday, though spring wheat has struggled to participate in any gains. The question for wheat is whether it can repeat short-side profit-taking that most likely drove the winter wheat market higher on Friday.

Trade focus will be on this week’s US Wheat Quality Council’s Hard Spring Wheat and Durum Tour, which starts Tuesday. Updated 7-day weather forecasts have 1-3 inches rains in the northern US Plains, while the Lower Plains remain dry. The 8-14 day outlook has the same pattern for precipitation.

Bangladesh has signed a “memorandum of understanding” to purchase 700,000 tonnes of US wheat on an annual basis over the next 5 years. To me…just a piece of paper and no guarantee of anything. Plus…who can trust a trade deal with Trump anyway.

Hard to sustain a rally in wheat without the leadership support of the row crops.

CANADIAN GRAIN MARKET

ICE canola futures closed little changed on Friday after the market retreated from earlier gains.

The early strength in canola was linked to strong gains in Chicago soyoil, but canola cooled when that market pared its advances into the close. Weather also helped to pull the canola back from its highs, as meaningful rainfall as well as cooler temperatures are in the forecast for the Prairies from Saturday through Tuesday. However, heat and dryness are expected to return to some areas afterward.

Friday’s Alberta crop report showed incremental improvement in major crop conditions. The province’s canola crop was rated 64% good to excellent as of Tuesday, steady from a week earlier and up 6 points from June 30.

EU rapeseed futures were lower on Friday, while Malaysian palm oil rallied higher.

November canola was up a very modest 40 cents on Friday to close at $700.30/tonne, and January gained 80 cents to $709.50.

For today… canola futures are down $10/tonne to start this morning. Nov canola is trading $10.10 lower currently at $690.200/tonne, unable yet to advance back above its 20-day moving average ($701)…50 day at $698. Also…the 20-day average is veering lower now and threatening a bearish crossover move below the 50-day. That has chart technicians on edge.

Notable rainfall received on the weekend and forecast this week across portions of the US Midwest has the soybean complex giving back some of Friday’s gains to start the week.

Recent rain in the western Prairies was likely helpful to crop potential, but canola on the eastern Prairies has lost yield potential, making it difficult to determine the net effect this early. Some welcome rain expected today and Tuesday in most areas before a turn to hotter/drier comes into play later this week.

Friday’s Commitments of Traders (COT) report confirmed managed money traders have been actively taking profits on long positions with another 14,806 contracts sold on the week ending July 15…lowering their overall net long position to 108,700 contracts. They do seem to be taking advantage of rallies like the one seen late last week to sell into recently.

In related markets…CBOT soy complex, EU rapeseed and Malaysian palm oil markets are all trading lower this morning.

Still underlying strength in soyoil remains due to US biofuel demand expectations. But even soyoil is weaker this morning…and chartists are watching the bearish reversal posted Friday on profit-taking from a recent run higher to test contract highs. Bean oil trend is still higher, but price action Friday and this morning is a little suspect.

Quick Note on Peas

Our colleague Bruce Burnett faced questions on yellow peas at last week’s Ag in Motion event. He notes the prospects for a good crop and continued tariffs from China (100%) have weighed on Prairie cash markets. Current pea prices range from $8.00 to $8.50/bu across the Prairies. This marks a sharp drop from both last year and the previous five years. The ugly news is that the Chinese tariffs are expected to continue through the 2025-26 marketing year.