GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS
OVERNIGHT GRAIN TRADE
ICE canola futures are trading higher for a second consecutive session this morning…up $4 to $5/tonne on the front month contracts…after falling to a 5-month low on Monday.
Chicago soybean futures are up 4 cents/bu this morning, with the oil/meal products also posting gains. But bean bulls are still sputtering as meal futures flirt with contract low territory.
Bean futures continue to feel pressured by the lack of Chinese demand and increased competition for export sales from Argentina. Argentina on Monday temporarily eliminated export taxes on soybeans, grains and their byproducts, as well as on beef and poultry, in a bid to speed up sales abroad and rake in much-needed dollars to prop up the flagging peso. Chinese buyers then reportedly 20 cargoes of Argy soybeans, dealing another setback to US farmers already shut out of their top market and hit by low prices. China has yet to buy soybean cargoes from the autumn US harvest, an unusual delay, with the window for possible deals shrinking.
CBOT corn futures are a penny or less this morning. Corn market bulls are trying to show resilience to keep alive a price uptrend on daily charts. Defense of this week’s low will be critical for the bulls to defend to keep the 6-week price uptrend intact.
US wheat markets are rising 1 to 3 cents. Wheat futures showed short-covering strength Tuesday, and now need to show important follow-through buying today or Thursday, to begin to suggest market bottoms are finally in place. Wheat traders still face a bucket full of bearish factors limiting upside potential.
In Other News
– PM Carney expects constructive trade talks with China to deepen...Canadian Prime Minister Mark Carney said he had “constructive” trade talks with Chinese Premier Li Qiang and expected the dialogue to deepen over time, as both countries seek to navigate a way out of a tariff conflict. Ties deteriorated after Canada imposed tariffs on imports of China-made electric vehicles, as well as Chinese steel and aluminium last year. Beijing fought back by levying hefty taxes on Canadian canola imports, but said the tariffs were preliminary, keeping the door open for further dialogue.
Both countries have made efforts to repair ties after US President Donald Trump returned to the Oval Office in January and slapped tariffs on their respective imports. In June, the Chinese premier told Carney in a phone call that there were no deep-seated conflicts of interest between the two countries.
Carney and Li discussed “agriculture and agri-food products, such as canola, as well as seafood and electric vehicles,” according to a readout of the conversation released by Carney’s office.
Following the release, China’s most active Zhengzhou rapeseed meal futures fell 3.1%. “Rapeseed meal prices fell today following the China-Canada talks, with the market expecting positive signals to help restore China-Canada canola trade and thereby boost future supply,” said Zhang Deqiang, an analyst at Shandong-based Sublime China Information.
Li told Carney that he hoped Canada would establish a “correct” understanding of China, respect each other’s core interests and major concerns, and lay a solid political foundation for bilateral relations and cooperation, according to China’s official Xinhua news agency. Trade with Canada has grown rapidly since the start of the year, and Beijing is willing to work with Ottawa to maintain and develop this “positive” momentum, resolve mutual economic and trade concerns, and deepen cooperation, Li said.
– China expands Argentina soybean buying to 20 cargoes… Chinese importers kept up a hectic pace of Argentine soybean purchases after the South American supplier’s move to abolish export taxes temporarily this week made its prices competitive. The purchases are chipping away at US market share as its farmers begin harvesting a bumper crop shunned by China amid a trade war between the world’s two largest economies. Since Argentina lifted its tax on Monday, Chinese buyers have booked about 20 cargoes, or roughly 1.3 MMT of Argentinian soybeans.
The continued purchases from Argentina are helping China fill more supply gaps during a period usually dominated by US sellers. Beijing has not yet booked any US soybeans from its autumn harvest.
– EU 2025/26 oilseed imports down… European Union soybean imports for the 2025/26 season, which began in July, had reached 2.86 MMT by September 21, down 4% from the same period a year earlier, according to data published by the European Commission. EU rapeseed imports in the same period totalled 0.79 MMT, down 35% year on year. Meanwhile, EU soymeal imports fell by 4% to 4.01 MMT and EU palm oil imports were at 0.60 MMT, down 25% from a year earlier.
– EU will delay anti-deforestation law another year… The European Union will delay its anti-deforestation law that will ban imports of commodities including soy, beef, cocoa and palm oil linked to forest destruction, the European commissioner for the environment, Jessica Roswall said on Tuesday. This will be the second delay in the policy’s launch. Brussels had already delayed the policy’s launch by a year after complaints from industries and trade partners including Brazil, Indonesia and then-US President Joe Biden’s administration.
Roswall said the delay was necessary to address concerns about the information-technology system and was not linked to US concerns about the policy.
– Malting barley exporters target Mexican market… Canada’s malting barley industry is setting its sights on the Mexican market. It is the world’s second largest importer of processed malt and the third largest buyer of malting barley. Canada is eager to expand sales into that market to reduce its reliance on China and the United States, two markets where there have been a series of recent trade challenges. The Canadian Malting Barley Technical Centre (CMBTC) has been focused on market diversification the past couple of years, and Mexico is an obvious first choice. It is the second or third largest market for Canadian processed malt in any given year, but it has not been a buyer of malting barley until recently.
México’s maltsters have been buying their malting barley from the US, France and Australia. But now that Australia is back in the Chinese market after a four-year hiatus due to a trade spat, there is an opportunity for Canada to gain a foothold in Mexico. Mexico purchased 33,000 tonnes of Canadian malting barley in April of this year, the first cargo since 2020. The CMBTC hopes to push the door of opportunity open wider during a trade mission at the end of October, the first to that market in many years.
Peter Watts, managing director of the CMBTC says Canada is going to have a lot of barley to sell in 2025-26. Statistics Canada pegs the crop at 8.23 MMT, but he believes the agency’s model-based estimates missed the mark. “Everybody feels that number is too low,” he said. He believes 9 MMT is “not unreasonable,” and fully expects StatCan to ratchet up its number by the final December report.
But the challenge for Canada is that Australia has regained its position as the top importer to China, vastly reducing Canada’s share of its top market. Canada shipped 1.6 MMT of malt and feed barley to China in 2024-25, which was less than half of what it was sending when Australia was out of the picture. That’s why finding new markets or expanding existing ones is paramount.
– Bunge to acquire North West Terminal Ltd... Bunge intends to acquire the grain elevator assets of North West Terminal Ltd. at Unity, Sask. The company announced the deal in a Sept. 23 news release outlining the purchase agreement. It includes the grain elevator and storage assets but not the fermentation and distillation facility on the same site. The facility has storage capacity of 63,000 tonnes, making it one of the largest in Western Canada, as well as full cleaning and drying capability. In addition, both major railways serve the site. The agreement is subject to closing conditions, and is expected to close in October.
Outside Markets
The Dow Jones Industrial Average closed 88.76 points lower on Tuesday to settle at 46,292.78, while the S&P 500 was down 36.83 points at 6,656.92. Early Wednesday, the December Dow Jones Futures are up 54 points.
Global markets are subdued this morning. Wall Street futures have edged up, while TSX futures are also climbing after Canada’s main stock market touched a milestone 30,000 points before closing lower yesterday.
During a speech Tuesday, US Federal Reserve chairman Jerome Powell repeated his hawkish view that there was no reason to rush further US interest rate cuts considering the upside risks to inflation. That resulted in a stronger US dollar and mixed Treasury and equity markets.
The December US Dollar Index is up 0.612 at 97.505. The Canadian dollar weakened against its US counterpart…currently quoted at 72.15 US cents.
Nov crude oil futures are up $0.99 at US $64.40/barrel. Oil prices are moving higher as an industry report showed US crude inventories declined last week, adding to a sense in the market of tightening supplies.
“The market is expecting supply excess and stock builds globally in the last quarter of the year, but the focus recently has shifted back to Eastern Europe and the possible introduction of fresh sanctions on Russia,” said PVM Oil Associates analyst Tamas Varga.
Traders have taken note of Donald Trump’s comment at the UN yesterday that NATO countries should shoot down Russian aircraft that ignore airspace restrictions and warnings. That followed similar warnings from Romania and Poland. Trump also seems to have changed his stance over the war (again), suggesting Ukraine could win back all its territory with ongoing help from the US and NATO. Nothing alarming for commodity markets but likely a shift that will provide psychological support in crude oil.
Grain Markets
Chicago soybean futures had been oscillating between small and losses overnight, but are now trending 4 cents/bu higher. Bean futures came back on Tuesday to close with fractional to 3 cent/bu gains, led by the deferreds following a recent drop to 6-week lows. Nov beans are up 4.75 cents this morning at $10.17/bu. It appears that buyers are stepping in at the $10.00 level, though upside potential remains limited. Tuesday’s higher close broke a four-day streak of lower sessions.
Soymeal futures are up $1/ton this morning. Soyoil futures are up 41 to 49 points, adding to yesterday’s 18 to 35 point gains.
This week’s news of Argentina scrapping export duties on all grains to zero until October 31 immediately shifted global soybean trade flows. China reportedly immediately bought from Argentina (20 cargoes)…leaving US new crop bean business with China at ZERO.
Chicago corn futures are fractionally to a penny higher this morning. The corn market closed Tuesday’s trading session with contracts up 2 to 4 cents.
Traders are monitoring some probable near-term US corn harvest delays. Planting weather in Argentina and Brazil looks mostly favorable.
US wheat markets are pushing 1 to 3 cents higher. The wheat market saw strength on Tuesday, as all three US exchanges were higher on Tuesday…with spring wheat futures closing Tuesday up 1 to almost 4 cents.
Chicago and Kansas City are watching US winter wheat planting, while Minneapolis is looking at the tail end of the North American spring wheat harvest. The USDA’s updated US wheat production numbers are out Tuesday (Sept 30) in the US small grains summary report from USDA.
Export demand for wheat has been good, but there’s a lot of competition following increased production in Canada, Europe, Russia, and Ukraine. The trade is also monitoring development weather in Argentina and Australia.
CANADIAN GRAIN MARKET
ICE canola futures ended higher for the first time in five sessions on Tuesday. Bargain buying helped to lift canola, after the market touched its lowest level since early spring on Monday. Gains in Chicago soybeans and soyoil, along with European rapeseed, further underpinned canola.
Advances in canola were limited by improving weather for the canola harvest, especially in the eastern Prairies where fieldwork has been stop-and-go.
Nov canola futures rebounded $7.20 higher on Tuesday to close at $617.60/tonne, and January was $7.80 higher at $631.10.
For today… canola futures are trading $4 to $5/tonne higher this morning, continuing the rebound, bargain hunt-type gains started on Tuesday after lifting correctively off 5-month lows to start the week. Too early to draw “bottom-making” conclusions, but at least a little encouraging. Nov canola is up $4.90 right now at $622.50/tonne, with first level overhead chart resistance at the 20-day moving average ($627).
Higher CBOT soy complex trade this morning is helping lift canola futures. EU rapeseed futures are also quietly trading higher…and might also be further along in defining bottoming price action of the charts amid improving demand. Malaysian palm oil futures are also slightly higher…stopping the past week’s slide lower.
To access the latest futures prices, go to https://www.producer.com/markets-futures-prices/
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