AM Market Report – September 18, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are posting $2 to $3/tonne gains to start this morning…probably corrective price action following yesterday’s $12/t sell down.

Chicago soybean futures are trading 2 to 3 cents/bu lower this morning, adding to yesterday’s declines, with soyoil and meal also trending lower.

CBOT corn futures are less than 1 cent lower this morning.

Corn and soybean futures sagged on Wednesday, retreating from multi-week highs on profit-taking and an uptick in the US dollar, while a steep drop in soyoil futures added pressure. Harvest activity in the US continues to influence the corn and bean markets in the background.

US winter wheat futures markets are flat to a penny higher, while spring wheat futures are down a penny. Forecasts for rains in the southern US Plains adding to bearish sentiment…should recharge soil moisture to bolster production prospects as US farmers start to plant the 2026 winter wheat crop.

Spring wheat futures are feeling the weight from Statistics Canada raising its estimate of Canada’s 2025 all-wheat harvest to 36.6 MMT, up 1.9% from last year and above its August 28 estimate of 35.548 MMT.

Traders await the outcome of Friday’s phone meeting between President US Trump and Chinese President Xi. But technology is the main topic; soybean trade may or may not be discussed.

In Other News

– Wheat markets are under duress… Two of Canada’s top wheat buyers have agreed to significantly ramp up their purchases from the United States. The US and Indonesia announced a new trade deal in July that removes Indonesian tariffs on most of US products. That deal follows a memorandum of understanding (MOU) between US Wheat Associates (USW) and APTINDO, Indonesia’s flour milling association, signed earlier that month. Under that agreement, APTINDO committed to doubling its annual purchases of US wheat to 1 MMT per year for the next five years.

Indonesia is Canada’s largest wheat customer, purchasing 2.1 MMT of the crop through the first 11 months of 2024-25.

USW also signed an MOU with the Government of Bangladesh in July. The country has agreed to purchase 700,000 tonnes of US wheat annually for the next five years. Bangladesh has historically been a swing buyer of US wheat with purchases ranging from no imports to a high of 450,000 tonnes in 2019-20. Bangladesh is the seventh largest buyer of Canadian wheat, purchasing 1.07 MMT tonnes during the first 11 months of the 2024-25 campaign.

Leif Carlson, director of market intelligence and trade policy with Cereals Canada, said the two MOUs are a “big concern” for Canadian wheat growers and exporters. “Any deal where they make a commitment to buy a certain amount of US product isn’t how you’d like to do trade,” he said. “You’d like it to be driven by market factors.”

– Big pulse crop for Canada… Statistics Canada yesterday projected even larger Canadian lentil and pea harvests than previously expected, with both crops surpassing the August forecast and running well ahead of last year’s levels.

StatCan has put 2025 national lentil output at 2.972 MMT, up from the federal agency’s August forecast of 2.655 MMT in August and 23% above last year’s crop of 2.421 MMT. Average yields are estimated at 1,517 lbs/acre, sharply higher than the August estimate of 1,355 lbs and well above 2024’s 1,281 lbs. If realized, the lentil crop would be the largest since 2016’s 3.193 MMT.

As well, the quality is good. Many in the industry thought the rain would result in a bunch of No. 3s, but the crop is reportedly coming in at No. 2 grade or better for the most part. It’s usually a struggle to find No. 1 large green lentils, but this year she estimates that 12 to 15 per cent is No. 1 compared to five to 8% in a normal year.

Canada is facing tough competition in lentil export markets from rival producers Australia, Russia and Kazakhstan on both the greens and reds.

Canadian lentil growers are not willing to sell at today’s diminished prices. But red lentils quoted around 21 cents/lbs may have bottomed out because farmers have already sold all their extra bushels.

The last half of the marketing year will depend on the Australian harvest and whether growers in that country are willing sellers, as well as India’s weather conditions.

Meanwhile, dry pea output is now estimated at 3.563 MMT, an increase from 3.408 MMT in August and 13.7% larger than last year’s 3.132 MMT. Yields are projected at 38.3 bu/acre, compared to 36.6 in August and 34.8 in 2024. With harvested area also higher than a year ago, the 2025 crop is on track to be the biggest since 4.593 MMT in 2020.

Chickpeas: Production is forecast at 331,000 tonnes, above August’s 308,868 and 14.3% higher than last year’s 289,300.

Flax: Output is estimated at 365,414 tonnes, up from 327,855 in August and 11.5% larger than last year’s 327,800.

Mustard: Production is pegged at 140,852 tonnes, slightly higher than August’s 134,345 but still down from 192,300 in 2024 on reduced acreage.

Canaryseed: The September estimate is 185,351 tonnes, an increase from 152,919 in August and close to last year’s 185,253.

Dry beans: Production is seen at 351,787 tonnes, little changed from August’s 352,722 but still down from 2024’s 423,900.

– Carney heads to Mexico in search of an ally and opportunities… Prime Minister Mark Carney heads to Mexico Thursday with two separate, but related, goals. The first is to find ways to work with Mexico to preserve North America-wide free trade, or at least as much of it as can be saved from the most protectionist US administration in a century. The second is to develop a bilateral trading relationship with Mexico that operates independently of the whims of the White House, and can survive whatever fate lies in store for the Canada-US-Mexico Agreement (CUSMA) when its renegotiation finally happens.

The trip is expected to produce an agreement on a new Canada-Mexico comprehensive partnership and a security dialogue focused on issues such as transnational crime and drug-smuggling.

But there has also been some turbulence in the relationship, as there was during US President Donald Trump’s first term, and the trip is an effort to build trust between the two partners that neither will throw the other under the bus in the coming CUSMA negotiations with an untrustworthy Trump administration.

– US farmers face ‘financial calamity’ without extra aid soon… As US farmers enter autumn harvest season worried that low crop prices and a trade war could hurt their livelihoods, Republican farm-state lawmakers are urging US President Donald Trump’s administration to issue economic aid for farmers by year’s end. Discussions between lawmakers and the administration highlight the trade-offs Republicans face between loyalty to the president and representing constituents who have contacted their offices and flocked to town halls in their districts, worried about the impact of Trump’s trade policies.

Four farm-state members of Congress told Reuters they are in talks with the USDA and other administration officials about an aid package, ideally by the end of December. Republican Senator John Hoeven (North Dakota), who leads agriculture funding on the appropriations committee, said he is discussing with the administration an approach similar to that taken during Trump’s first term, when the federal government issued US $23 billion in payments to farmers to offset losses from a trade war with China. He said emergency aid could also be added to a government spending bill.

Hoeven said farmers need assistance “the sooner, the better, but certainly by year-end.” On Monday, Agriculture Secretary Brooke Rollins said she is working daily with Congress to evaluate how much aid might be needed this autumn, but did not specify a timeline or amount.

The US federal government is already expected to spend more than $40 billion on payments to farmers in 2025, according to USDA data. The near-record sum is fueled by ad-hoc disaster and economic aid passed by Congress last December.

I wonder how much of this cash is WTO-compliant…or does that matter anymore?

– Beijing urges top hog producers to cut output… China has called on its top hog producers to “take the lead” in cutting output, state-run Shanghai Securities News reported, as the country battles a supply glut and sluggish consumer demand in its massive pork sector. At a high-level meeting on Tuesday, officials urged major companies to reduce breeding sows, lower slaughter volumes, and keep hog weights around 120 kg, the report said. The meeting, jointly held by the National Development and Reform Commission and the Ministry of Agriculture and Rural Affairs’ animal husbandry bureau, signals a stronger push by Beijing to rein in overcapacity and stabilize prices. Authorities also plan to tighten credit for hog production capacity expansion and cut subsidies that fuel pig output growth, the report said. The move comes as domestic hog prices in China plunge.

– Ethanol demand stays hot, even as production dips… US ethanol production did decline last week, but the numbers still reflect generally solid demand. The US Energy Information Administration says production averaged 1.055 million barrels per day, down 50,000 on the week, but up 6,000 on the year. The Renewable Fuels Association says US ethanol stocks of 22.602 million barrels were 235,000 under the previous week and 1.183 million less than a year ago. Iowa State University’s Center for Agricultural and Rural Development says the estimated operating margins for the average Iowa plant remained solidly in positive territory.

– Bank of Canada cuts interest rate by quarter-point to 2.5%… The Bank of Canada cut its benchmark interest rate by a quarter-point on Wednesday, lowering borrowing costs for the first time since March as US tariffs continue to batter the Canadian economy. As widely expected, the bank’s governing council voted to lower the policy rate to 2.5% from 2.75%. This follows three consecutive rate decisions where the central bank remained on hold.

The bank has been reluctant to ease monetary policy amid a trade war with the United States, given the possibility that US tariffs and Canadian counter-tariffs could push up consumer prices and reignite inflation. But that calculus has shifted as unemployment has risen, exports have plummeted and inflation has remained relatively benign.

Outside Markets

The Dow Jones Industrial Average rose 260.42 points on Wednesday to settle at 46,018.32, but the S&P 500 tipped 6.41 points lower to finish at 6,600.35. Early Thursday, the December Dow Jones Futures are up 56 points.

Global stock markets are modestly upbeat this morning after the US Federal Reserve delivered its first interest rate cut this year. But Fed chair Jerome Powell also signalled a measured approach to further monetary policy easing, leaving investors unsure about the pace of future moves.

Wall Street stock index futures are in positive territory after the major US markets had a mixed close yesterday. TSX futures followed sentiment higher after the Bank of Canada also cut its key interest rate yesterday.

The December US Dollar Index is up 0.390 at 96.910. The Canadian dollar is weaker against its US counterpart…currently quoted at 72.60 US cents.

October crude oil futures are up $0.10 at US $64.15/barrel. Oil prices are ticking slightly higher this morning after the Fed cut US rates as expected.

Also noteworthy…US crude oil stockpiles fell sharply last week as net imports dropped to a record low amid a jump in exports to a near two-year high, the US Energy Information Administration said on Wednesday. Gasoline inventories also declined unexpectedly in the week ended September 12, while distillate stockpiles rose more than expected.

US crude stocks fell by 9.3 million barrels last week to 415.4 million barrels, the EIA said, compared with analysts’ expectations in a Reuters poll for a 857,000 barrel draw. US crude exports rose by 2.53 million barrels per day (bpd), to 5.28 million bpd, the highest level since December 2023. Net US crude imports fell by 3.11 million bpd, hitting their lowest level on record going back to 2021.

Grain Markets

Chicago soybean futures are trading 2 to 3 cents/bu lower this morning. The bean market posted 6 to 7 cent losses in the front months at Wednesday’s close. Nov bean futures are 2.5 cents lower early Thursday at $10.41/bu…slipping just below its 20-day moving average ($10.42).

Soymeal futures are down $1/ton this morning. Soyoil futures are down 14 to 30 points, adding to yesterday’s sharp 108 to 145 point declines.

USDA this morning reported US soybean export sales of 923,000 tonnes for the week ended Sept 11, which was about midrange of trade expectations of between 0.4 and 1.5 MMT.

Soyoil futures tumbled hard on Wednesday, as market players digested Tuesday’s biofuel blending proposal from the US Environmental Protection Agency. Bean oil futures had jumped on Tuesday as traders awaited guidance. But industry representatives said the agency’s proposal, including a 45-day comment period, failed to provide clarity on how to reallocate US biofuel blending obligations under the government’s Small Refinery Exemption program. Soyoil is a primary US feedstock for bio/renewable diesel.

“The EPA is no closer to finalizing biofuel policy than it was this summer, leaving biomass diesel production on hold,” StoneX chief commodities economist Arlan Suderman said in a client note.

US harvest activity is progressing normally. There’s been some rain in parts of the region with more in the forecast later this week, but coverage and totals remain uncertain.

The trade is also monitoring planting conditions in Brazil, which mostly look favorable as seasonal rainfall is expected to begin next week. Soybean planting in Argentina will start to get underway later this month. Early expectations are for rising planted area in South America to keep pace with demand, especially from China, which continues to avoid US soybeans due to tariff tensions.

Chicago corn futures are losing less than a penny this morning. The corn market closed Wednesday with losses of 2 to 3 cents/bu across the front months.

The weekly EIA report showed US ethanol production dropping 50,000 barrels per day in the week ending September 12 to 1.055 million barrels per day. That was still an increase of 6,000 bps from the same week last year. Stocks of US ethanol were down 235,000 barrels to 22.602 million barrels. Refiner inputs of ethanol were up 42,000 bpd to 922,000 bpd.

USDA this morning reported US corn export sales of 1.232 MMT for the week ended Sept 11, which was about midrange of trade expectations of between 0.5 to 1.9 MMT.

Traders are watching US corn yield results, expecting the USDA to further lower their projection in October because of the dry finish to the season. There are also disease issues in some areas. They are also watching early planting activity in South America.

US wheat markets are narrowly mixed this morning… Minnie spring wheat futures slipping around a penny lower, HRW fractionally mixed, while SRW wheat is mostly a penny higher. The US wheat complex ended weaker on Wednesday…spring wheat futures finishing 2 to 3 cents lower in the nearbys.

USDA this morning reported US wheat export sales of 377,500 tonnes for the week ended Sept 11, which was nearer the bottom end of trade expectations of between 300,000 and 650,000 tonnes.

Minnie Dec spring wheat futures are three-quarters of a penny weaker this morning at US $5.73/bu…holding near contract lows. Technically conditions are oversold, with MACD and Stochastics indicators starting to just hint at turning upward. Seasonally…this is around the time annually that spring wheat futures start an end of harvest type bounce…but we await better confirmation.

Spring wheat futures are not being helped by StatCan yesterday painting a brighter picture for Canada’s wheat harvest, with national output now expected to surpass both last month’s estimate and last year’s crop. Canada all wheat production now forecast at 36.623 MMT…a significant improvement from the Aug 28 initial projection of 35.548 MMT and is now almost 2% larger than the 2024 crop of 35.939 MMT. The average all wheat yield is estimated at 51.1 bu/acre, stronger than both the 49.6 bu reported in August and last year’s 50.2 bu.

The upgrade is driven mainly by spring and durum wheat. Spring wheat output is now seen at 26.607 MMT, up from 25.992 MMT in August and just above last year’s 26.532 MMT. Higher yields of 53.1 bu/acre, up from 51.9 in August and 52.1 in 2024…offset a 1.5% drop in harvested acres.

Durum wheat production is now forecast at 6.534 MMT, a big gain from 6.078 MMT in August and 2.4% higher than 2024’s 6.379 MMT. Yields are projected at 37.7 bu/acre, compared to 35.1 in August and 37 last year.

CANADIAN GRAIN MARKET

Steep weakness in Chicago soyoil weighed on ICE canola futures on Wednesday. Soyoil losses overshadowed StatCan crop production estimates released earlier in the day. The report pegged the 2025 Canadian canola harvest at 20.028 MMT, up only modestly from the August projection of 19.937 MMT and now 4.1% above a year earlier.

Soyoil was dragged lower by the US EPA on Tuesday offering little clarity on reallocating US biofuel production obligations under the Small Refinery Exemption program. European rapeseed and palm oil were both lower today as well.

The advancing Prairie harvest offered further price pressure.

November canola futures dropped $12.70 to close the day at $627.30/tonne, and January lost $12.40 to $639.70.

For today… canola futures are mostly around $3/tonne higher to start this morning…probably more corrective price action following yesterday’s bearish soyoil price influence. Nov canola is up $3.40 tight now at $631.50/tonne…still trading below all its key moving averages. MACD and Stochastics indicators point to grossly oversold chart conditions, which are hinting at a turn up. However, the main price downtrend line since the June high remains intact.

The absence of China buying continues to leave a gapping demand hole for the canola market. And US biofuel policy of the Trump administration continues to swirl with uncertainty. There is disappointment this week over the lack of progress by the EPA in finalizing their new biofuel policy.

StatCan yesterday nudged their Canada canola production estimate up to
20.028 MMT for 2025, but up only about 91,000 tonnes from the August projection of 19.937 MMT. The upgrade reflects a higher average national yield of 41.2 bu/acre compared to 41 last month. Harvested area remains steady at about 21.4 million acres. All the increase from August was tied to stronger expectations in Saskatchewan.

While the month-to-month change is slight, the September report points to a notable gain compared to last year’s crop. Nationally, canola production is expected to rise 4.1% from 2024. If realized, the 2025 crop would be the largest since 2018, when Canadian farmers harvested more than 20.7 MMT.

In related outside markets… CBOT soy complex and Malaysian palm oil futures are slightly weaker, though EU rapeseed futures are slightly higher.

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