AM Market Report – September 2, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are trading $2 to $3/tonne lower this morning, giving back all and more of what were $4 to $6/tonne gains overnight…and now adding to the steep $40/tonne loss posted during last week’s sell-off.

US grain markets are also lower this morning as the first trading day of the month of September finds risk aversion in the general marketplace. That’s keeping the speculative grain market bulls on the sidelines following a three-day holiday weekend. Also…markets seem spooked amid heavy selling in across stock market futures regarding uncertainty on US tariffs (more below).

Chicago soybeans are down 10 to 13 cents/bu this morning. Nov beans are falling 13.5 cents this morning after losing 4 cents last week. The bean market is consolidating after a rebound push higher in first half August, lacking a fresh bullish catalyst.

Chicago corn futures are 1 to 3 cents weaker this morning. While 3.25 cents weaker this morning, Dec corn advanced 8.75 cents last week.

US winter wheat futures markets are mostly 8 to 10 cents lower, while spring wheat futures are losing mostly 4 to 9 cents (contract lows).

In Other News

– Frost potential this week in US Midwest, Canada Prairies… World Weather Inc. Monday reported two shots of cold air will push through the US Midwest and eastern Canada’s Prairies this week. Wednesday will be the first round of cooler-than-usual weather for the eastern Prairies, while Friday and Saturday will be cold again over some of the same areas. Portions of the upper US Midwest will see some frost and a few freezes Thursday morning, with another opportunity for frost in the upper Midwest and Great Lakes region Sunday and Monday of next week.

The first shot of cold weather is due Wednesday morning, at which time frost will impact central and northeastern Saskatchewan and a few locations in far northwestern Manitoba. A reinforcing shot of cold air is expected late this week into much of the same region in Canada with some of the coldest weather expected Friday and Saturday. The coldest temperatures in the upper US Midwest will slip to the 30s F, with a few readings of 29-32 F on Thursday morning. The coldest air will be in northern Wisconsin, upper Michigan and Minnesota, where light freezes and frost are possible. Soft frost may impact a part of the eastern Dakotas, northern Iowa, northwestern Illinois and western and northern parts of lower Michigan.

“Some crop damage is expected, although this summer’s dry biased weather in eastern Canada had many crops advanced a little further than usual. Corn, soybeans, flax and late-planted canola will run a risk of damage. Potential damage in the upper US Midwest will mostly be to leaf mass, but if frost is widespread and significant enough it could change crop quality and for many soybeans that remain immature it could impact both yield and quality,” said the forecaster.

– US appeals court finds Trump tariffs unlawful... A US federal appeals court ruled Friday that many of US President Donald Trump’s tariffs are illegal…but it allowed for the levies to remain in place as the case likely makes its way to the US Supreme Court. The United States Court of Appeals for the Federal Circuit found that the “Liberation Day” tariffs and his fentanyl-related duties exceeded the powers of the national security statute he used to impose the levies. “It seems unlikely that Congress intended to…grant the president unlimited authority to impose tariffs,” the judges wrote in a 7-4 ruling.

Trump has relied on tariffs to realign global trade since his return to the White House and the ruling could upend his plans. The Liberty Justice Center, which represented some of the businesses fighting the duties, said in a post on social media that “the president cannot impose tariffs on his own.”

Trump used the International Economic Emergency Powers Act of 1977 to hit nearly every country with tariffs. The act, usually referred to by the acronym IEEPA, is a national security statute that gives the U.S. president authority to control economic transactions after declaring an emergency. IEEPA doesn’t mention the word “tariff” and the US Constitution gives power over taxes and tariffs to Congress.

The Center said “IEEPA does not give him unlimited, unilateral tariff authority. This ruling protects American businesses and consumers from the uncertainty and harm these unlawful tariffs have cause,” it said.

White House spokesperson Kush Desai said in a statement that “President Trump lawfully exercised the tariff powers granted to him by Congress to defend our national and economic security from foreign threats. The president’s tariffs remain in effect, and we look forward to ultimate victory on this matter,” Desai said.

Trump hit Canada with economy-wide duties in March after he declared an emergency at the northern border related to the flow of fentanyl. He partially paused levies a few days later for imports that comply with the Canada-US-Mexico Agreement on trade. Trump then increased the tariffs on non-CUSMA compliant Canadian products to 35% at the start of August, with the White House citing fentanyl and retaliatory tariffs as justification for the increase. US government data shows only a minuscule volume of fentanyl is seized at the northern border.

Ottawa has said it’s looking for a bilateral agreement to ease pressures from tariffs on steel, aluminum, copper and automobiles. Trump used different powers under the Trade Expansion Act of 1962 to enact those duties. At least eight lawsuits are challenging those tariffs.

– Political parties condemn tariffs… Political leaders across party lines are demanding immediate action from Ottawa in light of China’s new tariffs against Canadian canola seed. China’s preliminary 75.8% tariff on all Canadian canola seed shipments, which took effect Aug. 14, is the most recent escalation in a months-long trade spat. Last year, China announced an anti-dumping investigation against Canadian canola seed, a move many considered retaliation for Canada’s decision to impose 100% tariffs against Chinese electric vehicles. In March, China imposed 100% duties against canola meal, oil and peas, as well as 25% duties on pork and aquatic products, pointing to Canadian tariffs on Chinese steel and aluminum.

China has claimed that its investigation found the Canadian canola industry has benefited from substantial government subsidies and preferential policies, a claim that Canadian industry and government disputes. China has since announced another anti-dumping investigation into Canadian pea starch.

The timing couldn’t be worse for farmers entering harvest season.

– Canada appoints new envoy to India in sign of improving ties… Canada announced it had appointed a new high commissioner, or ambassador, to India in the latest sign of improving ties between the two trading partners. In a statement, the foreign ministry said veteran diplomat Christopher Cooter would take up the post, which had been vacant since the previous incumbent left last year.

Relations turned chilly in 2023, when then-Prime Minister Justin Trudeau accused New Delhi of involvement in the killing of a Canadian Sikh separatist. India denied the charge.

– Cordonnier initiates 2025/26 crop pegs… Noted crop consultant Dr. Michael Cordonnier left his US corn national yield average unchanged at 184.0 bu/acre with a neutral bias going forward. Cordonnier also left his US soybean yield unchanged this week, at 53.0 bu/acre with a neutral bias going forward. Cordonnier notes cooler temps in the forecast for the US Midwest with a growing need for rainfall.

With planting currently underway in South America, Cordonnier has also made his initial 2025/26 crop estimates. He forecasts Brazilian soybean acreage will increase 2%, with production increasing to 173.0 MMT in 2025/26, which would be up from 169 MMT as reported by USDA this year. Cordonnier pegs the Brazilian corn crop at 140 MMT, up from 132 MMT this year, with a more modest acreage increase, largely coming from the country’s safrinha acres. Cordonnier pegs the Argentina soybean crop at 49 MMT, down from 50.9 MMT in 2024/25, due to lower acres as producers rely less heavily on soybeans. He pegs the Argentine corn crop at 54 MMT, up from 50 MMT.

– China boosts soybean buys from Argentina, Uruguay amid US trade war…China’s soybean importers are boosting purchases from Argentina and Uruguay over the next year to fill the supply gap left by the absence of US shipments as the trade war drags on between Washington and Beijing. Chinese processors may buy up to 10 MMT of soybeans from the two South American exporters during the 2025/26 marketing year ending next August, which would be a record. They have already booked 2.43 MMT from Argentina and Uruguay for shipment from September to May next year, sources says.

The rise in supply from the two Latin American producers will add to large imports from Brazil to China, dealing another blow to US exporters as the world’s biggest soybean importer reduces its dependence on US farm products. With more soybean suppliers to China, the country will need less from the US.

This year, China has not booked any US soybean purchases for shipment in the fourth quarter, which is typically the key sales period for the United States as freshly harvested supplies reach the market. However, there are notable tonnages reported by USDA for that time period that USDA declares for “unknown destinations”, which may include undeclared shipments for China.

The world’s top two economies have imposed tit-for-tat import tariffs that have taken a toll on commerce, particularly agricultural goods such as soybeans. Since the trade war with China in US President Donald Trump’s first term, Beijing has taken steps to reduce its reliance on American farm goods to bolster its food security.

– Russian wheat export prices continue to decline amid weak demand...Russian wheat export prices continued to decline last week amid more active arrivals of the new harvest and sluggish export purchases. The price for Russian wheat with 12.5% protein content for free-on-board (FOB) delivery in late September to early October was US $230/tonne at the end of last week, down $5 from the previous week, said the IKAR consultancy. The SovEcon consultancy estimated the price at $232-234/tonne FOB compared to $236-239 at the end of the previous week.

“Exporters are cutting prices amid relatively weak import demand and the arrival of the new crop,” SovEcon said in a weekly note. Shipments at the port of Kavkaz, one of Russia’s key ports in the Azov-Black Sea basin, have accelerated slightly over the past two weeks, traders said. However, existing complications with vessel passage, which have caused most of August’s shipments to be postponed until September, are reducing exporters’ interest in new purchases.

– Australia set for above average wheat harvest… Australia’s wheat output is projected to drop 1% this year to 33.8 MMT, although the production is poised to be 22% above the 10-year average on the back of largely crop-friendly growing conditions, the agriculture ministry said. Barley and canola output are expected to rise with production of both crops likely to be above average, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said in a quarterly crop report.

“Despite a very dry and sporadic start to the winter cropping season in South Australia and Victoria, improved seasonal conditions throughout winter have boosted production prospects across Australia’s major winter cropping regions,” ABARES said in a report.

Australia’s canola output in 2025/26 is estimated at 6.4 MMT, up 1% from a year ago and barley production is set to rise 10% to 14.6 MMT, according to the ministry. In other crops, ABARES said Australian lentil production (mostly reds) is forecast to rise 34% to 1.7 MMT, while chickpea output is likely to drop 7% to 2.1 MMT.

– Canada’s economy contracts more than expected in the second quarter...Canada’s economy contracted in the second quarter by a much larger degree than anticipated on an annualized basis as US tariffs squeezed exports, but higher household and government spending cushioned some of the impact, data showed on Friday. This was the first quarterly contraction in seven quarters.

The GDP for the quarter that ended June 30 decelerated by 1.6% on an annualized basis from a downwardly revised growth of 2.0% posted in the first quarter, Statistics Canada said, taking the total annualized growth in the first six months of the year to 0.4%.

Outside Markets

The Dow Jones Industrial Average slid 92.02 points lower on Friday to settle at 45,544.88, while the S&P 500 was down 41.60 points at 6,460.26. Markets were closed Monday for the Labor Day holiday. Early Tuesday, the September Dow Jones Futures are down 397 points.

Global stock markets are trending lower this morning as investors awaited economic data this week that could reinforce expectations for a US Federal Reserve interest rate cut this month. Wall Street futures are in negative territory after major US markets closed lower Friday, weighed down by AI-related shares. TSX futures followed sentiment lower after Canada’s main stock market closed at another record high on Friday.

Market focus will be on Friday’s US nonfarm payrolls report, which will be preceded by data on job openings and private payrolls, providing investors and the Fed a clearer picture of the labour market that has become the centre of policy debate.

The September US Dollar Index is up 0.640 at 98.330. The Canadian dollar weakened against its US counterpart…currently quoted at 72.50 US cents.

October crude oil futures are up $0.97 at US $64.98/barrel. Oil prices rose as concerns about supply disruptions grew amid an escalation of the conflict between Russia and Ukraine, and as the market weighed whether coming US jobs data would lead to interest rate cuts.

Grain Markets

Chicago soybean futures are trading 10 to 13 cents/bu this morning coming out of the long weekend…pressing overnight lows. Bean futures posted stronger trade at Friday’s close of 5 to 8 cents, but the Nov contract was still down 4 cents on the week.

Soymeal futures are losing $4/ton this morning, with the Oct contract losing $4.90 last week. Soyoil futures are up a modest 8 to 12 points this morning, but overnight gains have been fading in the morning hours trade. Oct bean oil fell 34 points last week.

Trade war issues are taking front-and-center stage. On Friday, a US Court of Appeals for the Federal Circuit ruled US President Donald Trump’s global tariffs are illegal. If the ruling stands, some trade agreements may need to be renegotiated…potentially messy situation to say the least.

Traders continue to wait for some sign of progress in tariff talks between the US and China. For now, the likelihood for an immediate deal seems to be slim.

On Friday, the Commitments of Traders Report showed money managers were net-long the US soybean market by 20,818 contracts as of last Tuesday (Aug 26). Money managers are net-short in soymeal futures by 61,711 contracts, while holding a net-long position in soyoil of 30,669 contracts.

Chicago corn futures are down 1 to 3 cents this morning. The corn market rallied on Friday, finishing 10 to 12 cents higher as some money flow gave the bulls a boost to end the month. Dec corn closed last week 8 cents higher, helped by the Friday move.

There is strong carry in the market, which signals to farmers the market isn’t currently demanding corn. That could become a sticky issue once the combines start rolling. Farmers, sharpening their pencils on their post-harvest marketing plans, will need to decide whether storing the new crop and selling it later will be profitable. The month of September will be very telling for US farmers expecting a large crop.

Trader positioning (as of Aug 26) in the latest Commitments of Traders report shows spec fund money managers cut a gross 7,242 short positions last week, and remain net-short 110,686 contracts overall.

Some are wondering whether the corn market has of late been establishing an early harvest lows…with the Dec contract bouncing 23 cents up from its August low. Yet to be determined if sustainable.

US corn demand remains solid, but the market continues to grapple with the supply impact of what could be a record large US crop. Dry weather in some areas could trim top end yields, but probably not enough to pull yield projections below record high levels. The trade is also watching the very tail end of the second crop harvest in Brazil, along with new crop planting prospects in South America.

US wheat markets are weaker again this morning and pressing down to contract lows…Minnie spring wheat futures are losing 4 to 9 cents, HRW off 9 to 10 cents and SRW wheat down 8 to 9 cents. The US wheat complex saw stronger trade on Friday across the three US markets…spring wheat closing 2 to 4 cents higher, though the Dec contract still fell by a dime on the week. Traders remain wary of rising world wheat supplies.

After a wet weekend, the forecast continues to look wet in much of the southern US Plains with winter wheat planting gearing up…1 to 3 inches in the forecast. The Canadian Prairies and northern US Plains are looking a little drier…likely helping the spring wheat harvest move along. A push into technically oversold territory chartwise could entice short-covering, but upside price momentum remains limited as harvest advances.

ABARES estimates Australia wheat production at 33.8 MMT for Nov/Dec, a 1% drop from last year. Russia’s wheat crop is estimated at 85.4 MMT according to SovEcon, with their export projection at 43.7 MMT, up from 43.3 MMT in their previous number.

Global wheat supplies are adequate relative to demand, particularly with a heavy US corn market. The seasonal trend for CWRS spring wheat bids points lower for a few more weeks before a seasonal rebound might be expected.

CANADIAN GRAIN MARKET

ICE canola futures fell for the fifth straight day on Friday as the previous day’s Statistics Canada crop production report continued to pressure.

The model-based StatCan estimates from the end of July pegged 2025 canola output at 19.937 MMT, below trade expectations. But given much improved moisture in August, most traders and analysts expect the crop to be revised higher in the future. StatCan will release its next set of production estimates Sept. 17.

Meanwhile, China’s prohibitive tariffs against imports of Canadian canola, canola oil and meal continue to lurk bearishly in the background.

Chicago soyoil, Malaysian palm oil, European rapeseed, crude oil were all lower on Friday as well.

Markets were closed Monday in both Canada and the US for the Labour Day holiday.

November canola dropped $9.30 on Friday to close at $626.40, and January was down $9.90 at $638.30.

For today… canola futures were higher overnight, but gains have eroded away in the past hour of trade…now punching $2 to 3/tonne lower on the front month contracts. Nov canola futures are down $2 right now at $624.40 after trading as much as $6 higher overnight. Still an ugly chart picture after plunging $40/t last week and down just over $100/t from the June high. No technical sign of a bottom yet, though oversold conditions have certainly developed.

Demand remains scale-down buying in nature…not much reason to pay up until we get through harvest. Plenty of supply to meet near-term crusher needs, with nothing yet positive coming out of Ottawa to rebuild shattered China export relations.

Nov canola futures broke through the recent range and are now under the Chinese news day flush. Without a near-term rebound…first above $650 (200-day average) and preferably $676.70 (Aug 25 high), further downside might be expected with next level chart support levels come in at $614.60, $601.70 and $580.40.

Friday’s Commitments of Traders (COT) report confirmed managed money traders had continued selling off their long positions during the week ending Aug 26. After another 6,372 contracts being liquidated on the week, they had reduced their net long position to just 29,204 contracts with most of those likely gone now after heavy selling seen at the end last week and month.

Related outside markets this morning…CBOT soybeans and meal are weaker, while soyoil is holding very small gains. Malaysian palm oil futures bounced higher overnight on strong export data for August and improved demand from India. EU rapeseed futures are slightly stronger following a reversal higher Friday from below the bottom end of its recent trading range.

On the feed grains… Gathering momentum for 2025 harvest season is one of the factors pulling Canadian Prairie feed grain prices lower. Lower cattle numbers in feedlots, still plentiful amounts of grass for cattle to graze and a lacklustre export market has also weighed on feed prices. Feed barley last week was priced at $260/tonne for Sept/Oct delivery into southern Alberta’s feedlot alley. Prices of $265/t are quoted for Nov/Dec delivery and $270 Jan/Feb/Mar.

With the availability of grass, it could delay the fall run of cattle heading to auction, perhaps into October. In turn, that won’t generate any increased demand for feed grains until then or even November. During the coming few months, feed prices for barley and wheat to drop below $250/tonne, which is where they bottomed out last year.

Our estimate of the 2025 Canadian barley crop is 8.2 MMT, unchanged from last year despite fewer acres.

Even before USDA’s big US corn crop estimate (Aug 12), we were already hearing reports of more competitively priced US corn moving into Western Canada.

Feed barley prices from key world exporters have been realigning in recent weeks. After dropping in early summer, Ukraine prices bounced back, partly due to concerns about its corn crop and feed supplies. Prices in Argentina and Australia also dropped. Meanwhile, prices in France have been steadier. Canadian barley has become the bargain, with our FOB Vancouver price (calculated from Alberta elevator bids) dropping below other origins and heading lower. This move could help spur more export sales for the critical fall shipping season.

The Canadian barley outlook for 2025/26 seems balanced. Easy access to cheap imported US corn will cap domestic feed barley prices for now and likely limit any price upside off the harvest lows.

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