AM Market Report – July 22, 2025 | The Western Producer

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are trending lower so far this morning…down $3/tonne…adding to yesterday’s declines.

Chicago corn and soybean futures prices are lower, with corn leading the way on follow-through selling pressure from Monday’s losses. Forecasts for crop-friendly rain in US grain belts this week is weighing on futures. This morning’s models are dialing back the extreme heat previously forecast (still hot though), while the northern half of the US Midwest still has precipitation chances over the next 10 days.

Soybean traders are also wary as they await progress in trade talks with China. China is the world’s largest importer of soybeans.

US winter wheat futures are fractionally to 2 cents higher this morning, while spring wheat futures are up around a penny. Reports that cheap Russian new crop wheat is hitting export channels now after a slow start is a developing market pressure point.

Meanwhile, showers are expected to aid northern US Plains and Canadian Prairie spring wheat areas in the coming days.

The USDA’s US national crop ratings were mixed over the past week. That followed another week of widely variable weather in key US growing areas, ranging from nearly ideal conditions to severe storms and flooding to hotter than normal temperatures. The US corn condition rating did hold at 74% good to excellent as of Sunday, the highest rating for this time of year since 2016 and unchanged from the previous week. Most of the US corn crop pollinates in July, a key reproductive phase that is crucial for determining yield.

68% of US soybean crops are good to excellent, down 2 points and below the average analyst estimate.

Hot weather and frequent rains have created a greenhouse-like effect that has boosted crop production prospects in the US Midwest. The USDA may have lowered soy condition ratings due to dryness in parts of the US soy belt.

73% of US winter wheat is harvested, compared to 72% normally in late July. 52% of US spring wheat is in good to excellent shape, 2% lower than last week, and at the low end of a range of analyst expectations.

In Other News

– Many Canadian exports can avoid Trump tariffs if CUSMA compliant…Canadian exporters have an escape hatch out of US President Donald Trump’s ill-conceived blanket tariffs…and that’s compliance with the Canada-US-Mexico Agreement (CUSMA). It would apply to the vast majority of Canadian goods, experts say, creating a stampede of companies rushing to get their paperwork done.

Under the treaty, which Trump signed in his first term in 2018, Canadian goods won’t be subject to the threatened 35% US tariffs, set for Aug. 1. About 86% of the value of Canada’s exports to the US have the potential to qualify, which experts say gives Canada a huge competitive advantage over the rest of the world.

What doesn’t qualify: Products with mainly non-North American content that are just shipped from Canada to the US, nor those that face Trump’s sector-specific tariffs, like the 50% fee on steel and aluminum. But beyond that, anything grown in or extracted from Canadian soil or that is built with Canadian labour can enter the US tariff-free, so long as the exporter fills in the right paperwork.

– Agriculture, agri-food groups make bid for spot in Carney’s economic agenda… A coalition of producer and agri-business groups is calling on Prime Minister Mark Carney to make Canadian agriculture part of his economic agenda. “Without a clear shift in approach, Canada risks falling permanently behind in a sector critical to domestic and export growth, food security, and economic resilience,” the groups said in an open letter published Monday.

The Canadian Federation of Agriculture and 29 other groups called attention to Canada’s shrinking share in the global agri-food market and slowing growth in annual productivity. “While governments in other nations are making bold investments in agri-tech, domestic food processing, production, and export readiness, Canada has been slow to respond, losing opportunities in the process,” they said.

The coalition said Canadian agriculture and agri-food has the potential to drive an additional $100 billion in GDP growth over the next 10 years. They asked the federal government to:

1) Create a focused plan for economic growth in the agricultural sector, including targets for investment in innovation, value-added processing, exports and others
2) Reduce regulatory burdens to make Canada more attractive to investors and innovators
3) Prioritize infrastructure that supports agriculture, like railways, ports and rural infrastructure
4) Modernize risk management tools to support the sector through trade and climate challenges

– Canada’s oat crop looks promising… Canada’s oat crop is looking average to above average, and that’s a good thing, says a processor. “We’re going to need that (production) to keep feeding the demand that’s out there,” Scott Shiels, grain procurement manager for Grain Millers, said during an interview at the Ag in Motion (AIM) 2025 show.

Statistics Canada estimates farmers planted 2.98 million acres of oats this year, a 2.6% increase over last year. Industry sources believe the increase is closer to 7 to 10 per cent.

Oat fields look better than most other crops this year because it is one of the last crops to go in the ground and took full advantage of the late rain. Our colleague Bruce Burnett is forecasting a Prairie average yield of 94.8 bu/acre, a 2.8 bu increase over last year. Production is forecast at 3.32 MMT, a 6.8% increase.

That’s a good because demand remains strong. Oats used to be cheap cattle feed? Those days are long gone. Oats have become a specialty health food. The majority of all oats grown are now used by manufacturers of oat milk, oat bars or breakfast cereal. The US has accounted for 78% of Canada’s exports through the first 10 months of 2024-25, with Mexico chipping in another 11%.

Oats and other agricultural products are so far insulated from US President Donald Trump’s ever-changing tariffs by the Canada-US-Mexico trade agreement.

Robust demand is holding oat prices up. Grain Millers was bidding $4.50/bu for new crop oats…about midpoint $4 to $5 price spread range of the past 3 years.

– Russia targets Southeast Asia for grain exports… Russia is targeting large markets in Vietnam, Indonesia, Malaysia, the Philippines and Bangladesh for grain exports in the new marketing season that began on July 1, Ilya Ilyushin, head of state export agency Agroexport, reports Reuters. Russia, the world’s largest wheat exporter, is seeking to diversify agricultural exports beyond traditional buyers such as Egypt and Turkey, which bans imports periodically to support domestic producers. Last season Russia boosted wheat supplies to Vietnam fourfold.

“Right now, our goal is to enter the Southeast Asian market. This includes not only Vietnam and Bangladesh, but also Malaysia and the Philippines. These are large countries with significant purchasing power and grain imports,” Ilyushin said.

Eduard Zernin, a board member of Russia’s Grain Producers and Exporters Union and CEO of Bio-ton agricultural holding, said that Russia is likely to face tough competition from Australia, the United States, and Canada in Southeast Asia. “This is a powerful group with ambitious competitors. They
have their own goals and objectives, their own ways of doing business. And we need to be prepared for tougher competition,” Zernin said.

– Fertilizer market and political update… Here’s a 7 minute video perspective of global politics driven fertilizer markets from Josh Linville, VP of Fertilizer at StoneX. Asking if Russia matters in the fertilizer world? According to Josh:

Urea: YES
UAN: OMG YES
NH3: Not really (exports low)
Phosphate: Still blocked by US duties
Potash: Russia is #2 supplier to US

Fertilizer Market Perspective

– BoC interest rate cut unlikely… Expectations for further interest rate cuts this year from the Bank of Canada are slowly evaporating. Erik Hertzberg of Bloomberg News notes, economists at two of Canada’s largest lenders, Bank of Nova Scotia and Royal Bank, now say Governor Tiff Macklem will keep the benchmark rate at 2.75% through the end of 2025. Despite the impact of US tariff uncertainty, growth appears to be holding up far better than the worst-case recessionary outcomes projected by economists earlier this year. Economists at Bank of Montreal and Toronto-Dominion Bank’s securities arm, on the other hand, still see at least one more rate cut this year.

Outside Markets

The Dow Jones Industrial Average ticked 19.12 points lower on Monday to settle at 44,323.07, while the S&P 500 Index rose 8.81 points to 6,305.60. Early Tuesday, September Dow Jones futures are down 34 points.

Global stock markets are mostly lower this morning on mixed corporate earnings, while investors took stock of tariff negotiations between the US and its trading partners. TSX stock index futures are pointed lower after Canada’s main stock index closed flat yesterday.

“The (stock) rally that began as a positioning squeeze has taken on a life of its own, now underwritten by stronger-than-feared earnings,” Stephen Innes, managing partner with SPI Asset Management, wrote in a note. “But with megacaps like Alphabet and Tesla stepping into the earnings confessional this week, the tape could shift from ‘don’t fight the trend’ to ‘watch your six’ in a heartbeat.”

The September US Dollar Index is up 0.025 at 97.595. The Canadian dollar strengthened against its US counterpart…currently quoted at 73.26 US cents.

Sept crude oil futures are down $0.74 at US $65.21/barrel. Oil prices are weakening amid concerns the brewing trade war between major crude consumers the US and the European Union will curb fuel demand growth by lowering economic activity.

“Broad demand concerns continue to simmer amid escalating global trade tensions, especially as markets eye the latest tariff threats between major economies and Trump’s potential announcements ahead of the Aug. 1 deadline,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “Investors are also eyeing the ripple effects of fresh U.S. sanctions on Russian crude,” she added.

Grain Markets

Chicago soybean futures are trading mostly 2 to 3 cents/bu lower this morning, though the nearby August contract is down 5 cents. Bean futures failed to see much buying coming out of the weekend, with contracts finishing Monday down 9 to 13 cents at the close. Soymeal futures are flat this morning. Soyoil futures are down 42 to 59 points this morning.

Monday’s weekly crop progress report from USDA showed a total of 62% of the US bean crop blooming, with 26% setting pods. Traders are showing no concern that condition ratings slipped 2 points to 68% in the good/excellent categories.

Forecasts into at least early August look hot for much of the US soy growing region, potentially causing some stress. But for now, parts of the region will continue to see regular rain and overall, the pattern is seen as beneficial.

With just over a month left in the 2024/25 US soybean marketing year, the pace of inspections is on track to meet the USDA’s estimate. There’s been more talk but no confirmation of China buying new crop US beans. Beijing continues to focus its demand on Brazil amidst the tariff tensions with the US.

Chicago corn futures are slipping 2 to 4 cents lower this morning, trading below all its key moving averages. The corn market closed out Monday’s session with slight buying off the midsession lows, though contracts were still 4 to 5 cents in the red. It’s a weather market in these final days of July…with US crop conditions deemed solid.

Crop Progress data indicated 56% of the US corn crop was silking as of Sunday, 2 points back of the 5-year average. The crop was 14% in the dough stage vs the 12% average. Condition ratings were unchanged at 74% good/excellent…best since 2016.

On the demand side of the ledger…USDA’s weekly export inspections report showed US corn inspections for export remain 29% above a year ago, with the USDA calling for just a 22% rise. US corn continues to maintain export market share, even as new crop Argentina and Brazil become more competitive.

US wheat markets are slightly higher this morning… Minnie spring wheat futures are up around a penny, HRW is 2 cents higher, with SRW wheat fractionally to a penny higher. US wheat pushed lower across the three markets on Monday, led by 8 to 9 cent declines in spring wheat.

Minnie Sept spring wheat futures are up a penny this morning at $5.88/bu, after falling 9 cents yesterday. Spring wheat has been under pressure big-time price pressure during July so far and into contract lows as harvest is already beginning in the extreme southern areas of the US spring wheat belt.

Crop Progress data after the close showed 73% of the US winter wheat crop harvested by Sunday, 1 point ahead of average. US spring wheat condition dipped 2 points in the latest week to 52% good/excellent. Traders are monitoring rainfall chances in dry parts of the spring wheat growing region in the US and Canada.

The US Wheat Quality Council Tour starts today and will generate some social media reports on US spring wheat and durum prospects.

Globally, the trade is watching harvest results in Europe, Russia, and Ukraine, in addition to planting and development in Argentina and Australia. The Russian ag ministry estimates that country’s wheat crop at 88-90 MMT for this year, well above some private estimates and the USDA.

Another factor weighing on the wheat market…a weaker corn market.

CANADIAN GRAIN MARKET

ICE canola futures fell on Monday, pressured by declines in other vegetable oils. European rapeseed and Malaysian palm oil both declined, while crude oil also posted losses on the day. Chicago soyoil did reverse earlier declines to finish higher, but soybeans were weaker amid easing US Midwest weather concerns about heat.

Portions of Western Canada did see rain over the weekend, although many areas are continuing to struggle with overly dry conditions. Showers are forecast for southern and some central Prairie areas this week, but many northern areas are likely to be shortchanged. Cooler temperatures are helping to lessen crop stress.

November canola dropped $6.20 on Monday to close at $694.10/tonne, and January fell $5.60 to $703.90.

For today… canola futures are trading another $3/tonne lower on the nearby contracts this morning, adding to Monday’s declines. Benchmark Nov canola futures are down $3.70 right now at $690.40/tonne…still below its 20- and 50-day moving averages, with the 20- looking to cross below the 50-day. Chart support resides at the recent lows of about $680, then $670…with failure at those levels…if it were to occur…setting up head-and-shoulders top talk amongst chart technicians.

European rapeseed production could reach 19.4 MMT, up from a short crop of 16.9 MMT last year. The year-over-year increase in European production will result in less import demand.

China remains a demand wildcard as they are in the midst of an anti-dumping investigation for Canadian canola seed…100% import tariffs already in place on canola soil and meal. And the Chinese are none too happy right with the Carney government levying tariffs against imports of Chinese steel…in addition to electric vehicles.

Traders continue to watch CBOT soyoil as a harbinger of canola price direction. Dec bean oil is trading within sight of contract highs on US biofuel demand prospects; futures are stalled here…at least momentarily. Bullish price momentum remains intact, but some caution being expressed here at the 56 cents/lbs level. Strength in the diesel fuel over the past 1.5 months (lower today though) is lending underlying support to bean oil.

Malaysian palm oil futures are edging up modestly this morning after a sharp 2% sell-off Monday. But palm oil has been trending generally higher since bottoming in May. The Malaysian Palm Oil Council (MPOC) expects prices to stay firm in August, supported by festive demand from India, the world’s largest palm oil consumer, and elevated US soyoil futures prices.

EU rapeseed futures are edging slightly higher this morning.

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