AM Market Report – September 15, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are trading mostly steady to $1/tonne lower to start this morning…coming off overnight lows. Canola futures last week rebounded $22.90/tonne off its summer lows. Chicago soybean futures are narrowly mixed now, also coming up off overnight session lows, with meal lower and soyoil higher. Friday to Friday last week, Nov soybeans rallied 19 cents/bu higher.

Chicago corn future down 2 to 4 cents this morning, led by the nearby contracts. Dec corn last week rose 12 cents/bu.

Last Friday’s price action in the corn and soybean futures markets was extra important, and telling. Following a bearish USDA monthly supply/demand report Friday at midday, both corn and soybean markets posted impressive rallies. Dec corn hit a seven-week high and Nov soybeans marked a two-week high. Friday’s price action was a classic “sell the rumor, buy the fact” scenario that suggests the bearish fundamentals of big US corn and soybean crops might be factored into futures prices.

Key for the corn and soybean market bulls this week will be to show some follow-through buying strength and not give back the recent price gains.

US winter wheat futures markets are steady to 2 cents higher this morning, but spring wheat futures are a penny or two weaker. Wheat found direction from the corn and soybean markets most of last and saw strength in with corn on Friday. Last week, Dec SRW wheat gained 4 cents, Dec HRW was up 9 cents and Dec hard red spring wheat futures rose 4 cents.

Meanwhile, many costs of crop production are through the roof. The best time to buy fertilizer is often late summer or fall, but instead of prices dropping after seeding, they’ve trended upwards. Very few producers are buying right now with prices of around $850/tonne being quoted for urea and phosphate approaching $1,300/tonne. At those prices, less fertilizer will be used.

In Other News

– Canada talks with China over canola dispute… Canadian officials had constructive talks with their Chinese counterparts about Beijing’s duties on canola during a recent visit, Prime Minister Mark Carney’s office said on Friday. China, the world’s largest importer of canola, imposed preliminary duties of 75.8% on Canadian canola seed imports in August. A final ruling will not come until next year.

The delegation, led by Saskatchewan Premier Scott Moe, also included Kody Blois, parliamentary secretary to Carney on agriculture was in China from September 6-9. The officials discussed “several trade irritants, including duties imposed on imports of canola products from Canada. The delegation had constructive discussions to these ends with Chinese officials,” said the statement. “The visit paves the way for further constructive engagement with Chinese counterparts to find pragmatic solutions to shared trade concerns.”

Carney said last week that he and other senior ministers would work to resolve the dispute. Canada, the world’s largest exporter of canola, shipped almost $5 billion of canola products to China in 2024.

– Marked improvement in Prairie dryness in August… Western Canada saw notable relief from abnormal dryness and drought in August, with conditions improving across much of the Prairie region after widespread rainfall events.

According to the Canadian Drought Monitor, 59% of Prairie agricultural lands were classified as abnormally dry or in some form of drought at the end of August, down sharply from 81% in July. The improvement marked the lowest coverage since April, when drought affected 41% of farmland.

The monitor attributed the improvement to above-normal precipitation in many southern areas and significant storm systems further north. Still, large pockets of severe to extreme drought remain, and long-term precipitation deficits continue to weigh on crop and livestock production.

Alberta experienced some of the most dramatic improvements, particularly in the southeast, where a series of slow-moving thunderstorms delivered more than 150% of average rainfall. The destructive Aug. 20 storm brought damaging winds and hail, but it also helped replenish soil moisture, refill dugouts, and recharge groundwater. By month’s end, only a small area around Medicine Hat remained in abnormal dryness to moderate drought.

Central and east-central Alberta also saw reductions in severe and extreme drought classifications. However, conditions in the Peace Region worsened despite a mid-month storm system, with extreme drought expanding northward. Farmers there continue to face poor pasture growth, limited surface water, and feed shortages, with grasshopper infestations compounding the stress, the monitor said.

In Saskatchewan, much of the province benefited from above-normal August rainfall. The southwest received more than 200% of average precipitation. By late August, most of the southwest and east-central areas were drought-free, apart from a small pocket of moderate drought in the far southwest. Severe and extreme drought also eased in central areas, though the northern region from Buffalo Narrows to La Ronge remained locked in long-term extreme drought. In the northeast, drought classifications even expanded.

Manitoba’s drought picture also improved, particularly in southern and central regions. Heavy late-August rains west of Winnipeg pushed monthly totals to more than 200% of normal, removing extreme drought from western Manitoba and improving conditions in eastern and central zones. Along the Saskatchewan border, large areas previously rated as extreme drought were reclassified after August rains.

Still, pockets of severe to extreme drought persist from Flin Flon to The Pas. Forage production and pastures remain stressed, and surface water supplies continue to lag despite the rainfall.

– USDA reconfirms big US crops… US farmers will reap a record large corn crop this autumn, eclipsing the previous record set two years ago by nearly 1.5 billion bu after harvesting their largest acreage in 92 years, the USDA said on Friday. The massive crop is due to swell US supplies of the grain by 59% to a seven-year high even as exports are projected to reach record levels, the USDA said in its monthly supply/demand report. The national average corn yield was cut 2.1 bu/acre from last month to 186.7 bu/acre, but harvested acres were increased 1.356 million from last month. Total new crop demand was increased 100 million bu from last month to offset the bigger supplies. The end result was a 7 million bu slide in estimated US corn carryover from August. But that is about 80 million bu above the average pre-report trade guess on new-crop carryover.

USDA trimmed 0.1 bu from last month’s national average soybean yield to land the estimate at 53.5 bu/acre. Harvested bean acres were increased 209,000 from last month resulting in a 9 million bu increase in the size of this year’s US bean crop. USDA raised new crop bean carryover 10 million bu from last month…that is 12 million bu more than the average pre-report trade estimate. USDA increased its new crop bean crush estimate, but more than offset that increase with a cut to the export outlook.

USDA’s estimate of 2025-26 US wheat carryover is now 844 million bu, down 25 million from last month. USDA increased estimated exports by 25 million to account to the cut to wheat carryover. Next up for the wheat market is the September 30 US Quarterly Grain Stocks and Annual Small Grains Summary.

USDA boosted 2025/26 world wheat stocks well above expectations after bigger crops in Russia, Ukraine, Canada, Australia, and the EU.

– Grain Growers call for Port of Vancouver to be included in federal major projects... Grain Growers of Canada (GGC) is calling on the federal government and the Major Projects Office to designate the Port of Vancouver and its connecting rail infrastructure as a project of national significance. This is needed to secure trade, protect economic growth “and maintain Canada’s reputation as a reliable supplier of essential products to the world,” it said.

The government’s list of projects of national significance is “incomplete without the inclusion of urgent upgrades required at the Port of Vancouver, Canada’s largest port and the country’s most critical trade chokepoint,” the organization said. Connecting Canada with the Indo-Pacific region, the Port of Vancouver is essential to Canada’s economic growth and prosperity, GGC said. It noted that more than 50% of the grain grown in Canada is exported through the port, accounting for $35 million in daily exports of grain and grain products.

The Major Projects Office (MPO) was announced by Prime Minister Mark Carney in August. The first series of projects being referred to the office for consideration was announced on Sept. 11. Those projects include:

– LNG Canada Phase 2, in Kitimat, B.C., which will double LNG Canada’s production of liquefied natural gas.
– Darlington New Nuclear Project, in Bowmanville, Ont., which will make Canada the first G7 country to have an operational small modular reactor.
– Contrecœur Terminal Container Project, in Contrecœur, Qué., which will expand the Port of Montréal’s capacity by approximately by 60%.
– McIlvenna Bay Foran Copper Mine Project in Saskatchewan, which will supply copper and zinc to strengthen Canada’s position as a global supplier of critical minerals for clean energy, advanced manufacturing and modern infrastructure.
– Red Chris Mine expansion in northern B.C., which will extend the lifespan of the mine by over a decade, increase Canada’s annual copper production by over 15% and reduce greenhouse gas emissions by over 70% when operational.

– Brazil’s Conab raises soy, corn output estimates… Brazilian farmers harvested a record 171.47 MMT soybeans and a record 139.67 MMT of corn in the 2024/2025 season, Brazilian crop agency Conab said in its final grain production report covering the period. The final numbers represent a 1.82 MMT increase in soybean output and a 2.67 MMT hike in total corn production expectations compared to Conab’s August forecast.

Conab also revised soy area and yields for all seasons between 2020/21 and 2024/25, resulting in a cumulative increase of 13.12 MMT in estimated production during the period. Crushing data and soybean carryover stocks were also adjusted in the broad revision, Conab said.

The agency upped Brazil’s soy export forecast for the 2024/25 season, saying the country will ship 400,000 tonnes more than it expected last month, or 106.65 MMT. Brazil sells most of its soybeans to China and continues to book sales due to stalled trade talks between the United States and China halfway through the prime of the US soybean marketing season.

Meanwhile, the new total corn production forecast reflects an expected increase of almost 2.5 MMT in Brazil’s second corn output, Conab said. Brazil’s second corn is planted after soybeans are harvested in the same areas and is mainly exported in the second half of the year, in direct competition with US farmers.

Brazilian farmers, who have nearly finished harvesting their 2024/2025 second corn crop, have already begun planting their 2025/2026 first corn in southern Brazil, Conab said.

Brazilian farmers also began sowing their 2025/2026 soy crop in Parana state and could harvest north of 180 MMT in the new season, according to private forecasts.

– Soybean fundamental watch… The chart below shows historical Western Hemisphere soybean production over the last three-plus decades, using historical USDA numbers along with Conab’s latest 2024/25 number for Brazil (a record 171.5 MMT) and private estimates for the new 2025/26 Brazilian crop (into the 180 MMT range). That Brazil number would result in another record harvest this season despite a US year over year decline and stagnant Argentine output; the US percentage of that total continues to decline, now under 1/3 of Western Hemisphere output.

– Expana expects record EU soft wheat harvest… This year’s European Union soft wheat crop is expected to have reached a record high, commodities research company Expana said after raising its estimate on the back of bigger than forecast harvests in central and northern EU countries. In its latest monthly report, Expana pegged EU soft wheat production for the 2025/26 season at 136.1 MMT, 3.3 MMT above its August projection. That was up 19.8% from 2024/25 and beats the previous record of 135.6 MMT in 2015.

Global grain harvest forecasts for 2025/26 have risen sharply in recent weeks, particularly for soft wheat in Australia and Russia and corn in the United States, which should intensify competition in animal feed and export markets, Expana said. “Given the expectation of a record global soft wheat harvest, European exporters will face an uphill struggle to offload this season’s exportable surplus,” it said.

EU soft wheat exports have been rather sluggish since the start of the 2025/26 season, owing to strong competition from Russian wheat and the lack of Chinese imports, it noted.

Expana also increased its EU barley crop outlook to its highest since 2008 at 56.2 MMT. That was 1.4 MMT higher than last month’s estimate and would also lead to hefty barley stocks at the end of the season.

Grain quality for this year’s wheat and barley has generally met market requirements, though protein levels were relatively low in several countries.

– World oil market to see higher surplus after OPEC+ hike… World crude oil supply will rise more rapidly this year and a surplus could expand in 2026 as OPEC+ members increase output and supply from outside the group grows, the International Energy Agency said. Supply will rise by 2.7 million barrels per day (bpd) in 2025, up from 2.5 million bpd previously forecast, the IEA, which advises industrialised countries, said in a monthly report, and by a further 2.1 million bpd next year.

OPEC+ is adding more crude to the market after the Organization of the Petroleum Exporting Countries, Russia and other allies decided to unwind its second layer of output cuts more rapidly than earlier scheduled. The extra supply has raised concern of a surplus and weighed on oil prices this year. Supply is rising far faster than demand in the IEA’s view, even though it upwardly revised its forecast for growth in world demand this year to 740,000 bpd, up 60,000 bpd from the previous forecast, citing resilient deliveries in advanced economies.

– BoC and Fed expected to resume rate cuts… The Bank of Canada has held interest rates steady for the past three rate decisions, while the US Federal Reserve has been on hold since December. In the meantime, inflation has not taken off in either country as much as feared, and both job markets have effectively stalled. It is widely expected both central banks will cut their benchmark interest rate by a quarter-point on Wednesday.

Statistics Canada won’t publish the August inflation numbers until Tuesday, only a day before the rate decision.

Outside Markets

The Dow Jones Industrial Average finished 273.78 points lower on Friday, settling at 45,834.22 and the S&P 500 was down 3.18 points at 6,584.29. Early Monday, the September Dow Jones Futures are up 61 points.

Global stock markets are trading steadily at/near record highs ahead of an action-packed week that looks certain to see the Bank of Canada and US Federal Reserve cut interest rates. TSX futures are pointed higher after Canada’s main stock index closed down in the previous session.

The BoC and the Fed paused their easing cycles to wait for more clarity about how US President Donald Trump’s tariffs would ripple through the global economy and affect consumer prices. Trade disruptions have taken a toll on both countries, and the Fed has come under increasing political (Trump) pressure to lower borrowing costs.

The September US Dollar Index is down 0.171 at 97.365. The Canadian dollar strengthened against its US counterpart…currently quoted at 72.31 US cents.

October crude oil futures are up $0.58 at US $63.27/barrel. Oil prices are edging higher as investors assessed the impact of this weekend’s Ukrainian drone attacks on Russian refineries, while US President Donald Trump said he was prepared to impose sanctions on Russia if NATO nations stop buying Russian oil.

Grain Markets

Chicago soybean futures were trading weaker overnight, but losses are being pared coming into the morning hours…now trading mixed…nearby Nov/Jan futures are fractionally higher, while deferred futures are mostly fractionally to a penny weaker. Bean futures posted 12 to 13 cent/bu gains in the front months on Friday, with the nearby Nov rallying 19 cents on the week…punching back above all its major mobbing averages.

Soymeal futures are down $2 to $3/ton this morning after Oct meal gained $7.10 last week. Soyoil futures are up 47 to 54 points this morning after Oct bean oil posted a 86 point gain last week.

The weekly Commitment of Traders report on Friday reported managed money flipping to a net short position in CBOT bean futures of 14,714 contracts by Tuesday (Sept 9), a move of 26,678 contracts to the short side.

On Friday, the USDA reaffirmed it’s view of a very large US soybean crop on the way and raised its ending stocks estimate slightly…generally a bearish report. But the market response…a contradictory rally…suggesting traders don’t agree with the USDA. Until farmers start picking soybeans, and yield monitors read what damage came from a dry August, the market seems convinced to stick to a more price friendly stance.

That said…the trade remains very concerned about the lack of US soy business with China…which currently borders on nothing to start the 2025-26 marketing year. Without China’s business, US ending stock supplies could continue to grow.

Chicago corn futures are mostly 2 to 4 cents lower this morning. The corn market closed with strength on Friday, as contracts were up 10 to 11 cents in the front months. Dec corn managed to close with a 12 cent gain last week.

USDA on Friday projected a US national average yield average of 186.7 bu/acre, a 2.1 bu drop from what they reported in August. Harvested acreage was raised, with production up 73 million bu to an all-time record large 16.814 billion bu. But 2025/26 US stocks trimmed 7 million bu…though still large at 2.11 billion bu, with demand raised on a 100 million bu increase to exports.

Interesting that corn futures have rebounding to 7 week highs despite a massive US corn crop on the way. Some technical suggestion that a corn bottom is already in place…with thoughts USDA’s corn yield average remains too high given a poorer finish to this year’s crop. Some revision lower to yield and production is anticipated in the coming months as harvest continues to advance, especially after disease and dry weather issues are fully accounted for.

US wheat markets are mixed this morning… Minnie spring wheat futures are 1 to 2 cents lower, HRW is flat, while SRW wheat is up 1 to 2 cents. The US wheat complex posted gains on Friday gains, as USDA gave a modestly friendlier US number. US wheat stocks dropped 25 million in Friday’s USDA report to 844 million bu on a boost higher in exports.

Spring wheat was fractionally higher on Friday, with the Dec contract up 5.75 cents last week. Futures stabilized last week, though technical headwinds continue to curb a more earnest correction from recent contract lows. A catalyst is a requirement to sustain a rally.

USDA bumped a 3.98 MMT increase to its world wheat balance sheet stocks to 264.06 MMT. There were several major culprits, as Russia production was up 1.5 MMT, with the EU raised by 1.85 MMT, Canada and Ukraine 1 MMT higher, while Australia saw the biggest increase, up 3.5 MMT.

CANADIAN GRAIN MARKET

ICE canola futures closed higher on Friday and last week, lifted by gains across the broader CBOT soy complex. Nov canola futures rose contracts rose by $8.00 on Friday to finish at $639.70/tonne, which was up $22.90/tonne on the week off its summer lows. The move higher was largely tied to strength in soybeans, soymeal, and soyoil, which provided the momentum needed to nudge canola off its recent lows.

Beyond price action, traders noted encouraging signals from the diplomatic front. Reports suggest the Canadian trade delegation held constructive talks with Chinese counterparts. While no formal agreements were reached, the dialogue sets the stage for future negotiations and raises hopes of improved export prospects down the road. Given China’s influence on oilseed demand, even incremental progress in talks can add a layer of optimism to the market.

For today… canola futures are trading around $1/tonne weaker to start this morning…but coming up off overnight session lows. Nov canola is down only a modest $0.10 now at $639.60/tonne after rebounding last week by almost $23/t.

Canola futures have been due for at least some corrective bounce as we have seen last week following a long and steady/steep slide through the summer. Nov has tested overhead resistance at its 20-day moving average ($638), but has yet to rally convincingly back above it. There are some flickers of bottoming price action, but the trade remains cautious.

Canola futures continue to track within a well-defined downtrend that has been in place since the June highs. Seasonal patterns suggest early October as a more likely period for price bottoms…meaning last week’s bounce may not signal a sustainable reversal up just yet. Without a major shift in fundamentals or fresh news, expectations for a clear upside price breakout seem premature.

I find it a bit intriguing that StatCan sales that as of July 31 (end of 2024-25 marketing year), Canadian canola stocks were 1.6 MMT, with only 378,000 tonnes in farmer-held storage. But…producer deliveries in the first five weeks of the 2025-26 already hit 882,800. Some of that is newly harvested new crop canola, but still a bigger number than I would expect…unless old crop carryin was larger than StatCan thinks.

Friday’s Commitments of Traders (COT) report confirmed managed money traders had continued selling off their long positions during the week ending Sept. 9. After another 20,801 contracts were sold on the week, they had managed to end up net short 641 contracts after being net long 141,907 contracts back on June 23. It is well worth noting that they did the same thing in March in reaction to the initial China tariff announcement on canola oil and meal imports. When they realized the sky wasn’t falling and jumped back in, prices eventually rallied over $200/mt from the reaction low. Just saying.

Canola price action is caught between statistical skepticism, China buyer absence, and policy-driven volatility in the biofuels and trade space. Without China, Canadian bins could remain fairly full, making domestic crush and alternative markets essential to balance supplies. As the largest buyer of canola seed from Canada, China’s actions to restrict imports of Canadian canola seed, oil, and meal carry undeniable weight in the market, and the long-term market implications may be more complex than they appear at first glance.

Related outside markets… Chicago soybean futures are narrowly mixed this morning after rebound rallying last week. Soyoil is higher. EU rapeseed futures are weaker. No trade in Malaysian palm oil futures…market close for holiday.