AM Market Report – September 4, 2025

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are sinking another $4 to $6/tonne lower to start this morning…that market seven moves lower in the past eight trading sessions…losing $53/tonne in that span on the nearby Nov contract.

Looming harvests of big US corn and soybean crops appear to be hanging over the grain futures markets at present.

Chicago soy complex futures are also weaker again…soybeans losing 5 to 6 cents/bu this morning, with soyoil and meal also in the red. Soybean prices have dropped nearly 26 cents since the start of the week. Bearish sentiment prevails amid looming worries about a complete absence of export sales to top buyer China amid heightened trade tensions. Beijing’s hosting this week of non-Western leaders, including Russian President Vladimir Putin and Indian Prime Minister Narendra Modi, has underscored its rivalry with the United States.

Chicago corn futures are steady to a penny higher this morning, but trade seems wary following the six-week peak posting on Tuesday as an expected record large US harvest limited rebound price action.

US winter wheat futures markets are 4 to 5 cents lower this morning, whole spring wheat is fractionally to a penny weaker. Wheat traders know the world supply for the next six months looks robust. Thus, wheat pricing cannot gain any sustained bullish traction.

In Other News

– Carney says he will take part in bid to resolve China canola dispute…Prime Minister Mark Carney on Wednesday said he and other senior officials would work to resolve a dispute with China over tariffs that Beijing has imposed on canola. China hit Canadian canola seed imports with preliminary 75.8% duties last month following a bogus anti-dumping investigation, escalating a year-long trade dispute. China is by far Canada’s biggest canola seed market.

“We’re going to work hard to get that right…the minister of international trade has been engaged, our foreign minister is engaged, I will be engaged to work to find a solution for our agricultural relationship,” Carney told reporters in Toronto.

Canada, the world’s largest exporter of canola, shipped almost $5 billion of canola seed and products to China in 2024, about 80% of which was seed. The steep duties on canola seed, if they remain in place, would likely all but end those Chinese imports.

– Could India pea tariff be looming?… It appears India may be thinking about implementing an import duty on yellow peas. India Pulses and Grains Association is concerned that an increase in yellow pea production in Canada and Russia could result in more imports. They say ongoing imports have brought down domestic prices, which could discourage Indian farmers from expanding their own pulse production. The IPGA says in order to raise the price of yellow peas in the domestic market, they are calling on the Indian government to impose a 30 to 40 per cent import duty.

In 2023, India introduced a duty-free import policy on yellow peas from Canada; since then, it has undergone several extensions. Stats show that India’s yellow pea imports from Canada rose from virtually nothing before the 50% tariff was removed in December of 2023 to 3.5 MMT since then to June 30, 2025.

The current duty free extension on yellow peas from Canada is set to expire March 31, 2026.

– Trump takes tariffs fight to Supreme Court… The Trump administration took the fight over its tariffs to the US Supreme Court on Wednesday, asking the justices to rule quickly that the president has the power to impose sweeping trade penalties under federal law. The US government called on the court to reverse an appeals court ruling that most of US President Donald Trump’s tariffs are an illegal use of an emergency powers law. The US Court of Appeals for the Federal Circuit left the tariffs in place for now, but the administration nevertheless called on the high court to intervene quickly in a petition filed late Wednesday.

The tariffs and their erratic rollout have shaken global markets, alienated US trading partners and allies and raised fears of higher prices and slower economic growth. Most judges on the US Court of Appeals found the 1977 International Emergency Economic Powers Act did not let Trump usurp congressional power to set tariffs.

The ruling involves two sets of import taxes, both of which Trump justified by declaring a national emergency: the tariffs first announced in April and the ones from February on imports from Canada, China and Mexico. Judges question Trump’s authority to impose tariffs without Congress. The US Constitution gives Congress the power to impose taxes, including tariffs. But over the decades, lawmakers have ceded authority to the president, and Trump has made the most of the power vacuum.

– EU proposes Mercosur trade deal… The European Commission presented the EU’s trade accord with South America’s Mercosur bloc for approval on Wednesday, and it appeared opposition from the deal’s main critic, France, has softened with promises of possible limits on farm product imports. The European Union and the bloc of Argentina, Brazil, Paraguay and Uruguay reached agreement to create the EU’s largest ever trade accord last December, some 25 years after negotiations were launched. It now needs consent in the EU, requiring a vote in the European Parliament and a qualified majority among EU governments, meaning 15 of 27 members representing 65% of the EU population.

The Commission and proponents such as Germany and Spain say the Mercosur deal offers a way to offset the loss of trade due to tariffs imposed by US President Donald Trump and to reduce reliance on China, notably for critical minerals.

France, the EU’s largest beef producer, has previously branded the deal “unacceptable”, while Poland, another farming heavyweight, has repeatedly expressed its opposition, an alliance that, with others, might have blocked the agreement. Hoping to allay their concerns, the Commission proposed a mechanism that would allow preferential Mercosur access for some farm products such as beef to be suspended. The trigger for the Commission to assess the need for such safeguards would be if the import volumes rose by more than 10% or prices fell by that amount in one or more EU member countries. It could take initial measures to limit imports within three weeks of receiving a complaint.

The Commission said it would closely monitor imports and also planned a US $7.38 billion crisis fund for EU farmers.

Since Trump’s re-election last November, the EU has hastily sought trade alliances, accelerating talks with India, Indonesia and the United Arab Emirates and deepening ties with existing free trade partners Britain, Canada and Japan. The Commission will also present an updated EU-Mexico agreement, struck in January, on Wednesday.

– China’s military parade could signal attempted shift in world order…China’s massive military parade on Wednesday was an attempt to position itself as the leader of a new emerging international order as the United States is losing allies. The parade, the biggest in the country’s modern history, showcased powerful high-tech weaponry as Beijing marked 80 years since Japan’s defeat at the end of the Second World War. It followed a multi-day diplomatic summit, which saw Chinese President Xi Jinping meet with world leaders over the weekend. Xi was flanked by Russian President Vladimir Putin and North Korea’s Kim Jong-un, among other leaders of 20 non-western countries.

Vina Nadjibulla, vice-president of research and strategy with the Vancouver-based Asia Pacific Foundation, says the heavily choreographed events of the past week are positioning China at the centre of an “alternative world order” while the US is dismantling the order that was put in place after the Second World War. “I think China is now again taking advantage of the fact that the US is destroying its own relationships with its allies,” she said.

Nadjibulla says the showcase won’t likely change hearts and minds in the West, but could have an impact in Africa, Latin America and Southeast Asia, where China in particular has worked to build diplomatic bridges. She says the lavish event also sends a signal that China is not afraid of the US.

Outside Markets

The Dow Jones Industrial Average topped down 24.58 points on Wednesday to settle at 45,271.23, though the S&P 500 posted a 32.72 point gain to close at 6,448.26. Early Thursday, the September Dow Jones Futures are down 12 points.

US stock market index futures are mixed again this morning (Dow slightly weaker, but the S&P 50 and Nasdaq are slightly higher). European stock markets are trending higher this morning, while Asian markets were mixed overnight. TSX futures are pointed higher after another record high close yesterday with August Canadian jobs numbers were on tap tomorrow.

Markets are wary ahead of US Dept of Labor monthly employment reporting on Friday…concern of a weakening US labor market…something that reinforces expectations the Federal Reserve will cut US interest rates this month.

The September US Dollar Index is up 0.172 at 98.255. The Canadian dollar weakened against its US counterpart…currently quoted at 72.42 US cents.

October crude oil futures are down $0.81 at US $63.16/barrel. Oil prices dipped, extending the more than 2% drop yesterday, as investors and traders looked ahead to a weekend meeting of OPEC+ where producers are expected to consider another increase in output targets.

Eight OPEC+ members will consider further raising oil production at a meeting on Sunday, as the group seeks to regain market share. OPEC+ has reversed its strategy of output cuts from April onwards, and has already raised quotas by about 2.5 million barrels per day, about 2.4% of world demand, to boost market share. Another output boost would mean OPEC+, which pumps about half of the world’s oil, would be starting to unwind a second layer of cuts of about 1.65 million barrels per day, or 1.6% of world demand, more than a year ahead of schedule. Eight OPEC+ countries are due to hold an online meeting on Sunday expected to decide on October output. OPEC+ includes the Organization of the Petroleum Exporting Countries plus Russia and other allies.

Grain Markets

Chicago soybean futures are leaking another 5 to 6 cents/bu lower this morning. The bean market saw lower trade on Wednesday with contracts down 9 to 10 cents in the nearbys. Soymeal futures are narrowly mixed this morning. Soyoil futures are 22 to 27 points weaker after losing another 69 to 82 points yesterday…threatening a downside breakout on price charts.

Nov bean futures are down 6 cents early Thursday at $10.25/bu. Technically, the Nov contract closed on Wednesday back below the 20-day moving average ($10.35) for the first time since Aug 8. This morning, Nov beans have dropped below its 100-day ($10.30) and 200-day ($10.26) and threatening the 50-day average ($10.23).

Traders anxiously await any signal of new-crop export sales to China…but currently we only hear crickets. Demand will have to pick up soon, with US farmers prepping combines for a big harvest.

Eastern US Corn Belt states have been dry, possibly taking off the top end of yield potential. However, this week’s 65% good-to-excellent rating is still the fourth-best end-of-August rating in ten years.

Chicago corn futures are see-saw between small gains and losses this morning…leaning fractionally to a penny higher presently. The corn market closed Wednesday losses of 4 to 5 cents across most contracts, as bulls struggled to follow through with Tuesday’s gains.

Fundamentally, a weaker weekly USDA crop rating for multiple Corn Belt states couldn’t provide support on Wednesday. Instead, traders still know the corn ratings ended August with the second-highest level for the last ten years.

US wheat markets are…you guessed it…weaker again this morning. Minnie spring wheat futures are fractionally to a penny weaker, while winter wheat futures are down 4 to 5 cents.

Wheat continues to be on the selling side of things, with the three US markets showing weakness. The wheat complex fell lower on Wednesday…spring wheat down 5 to 7 cents across most nearby contracts at the close.

Price pressure is coming from all directions. Argentina, Australia, Canada, the European Union, Russia, and the US all expect to have strong output this year. Russia may have quality issues, but its robust global supplies hang over the market. There’s a lot of wheat on the global market…and with more than ample harvests around the world, there shouldn’t be any near-term supply concerns.

CANADIAN GRAIN MARKET

ICE canola futures returned to their losing ways on Wednesday, after briefly finishing higher for the first time in six sessions on Tuesday. Losses in the Chicago soy complex amid China demand worries helped to pull canola lower, with crude oil, European rapeseed and Malaysian palm oil also posting losses on the day.

Prime Minister Mark Carney said in Toronto yesterday the federal government will work to find a solution to the China’s anti-dumping duties on imports of Canadian canola. China announced the prohibitive duty last month, which as seen as retaliation against earlier Canadian tariffs on Chinese EVs, steel, and aluminum.

November canola dropped $13.40 on Wednesday to close at $616.90/tone, and January lost $13.90 to $628.40.

For today… canola futures are down another $4 to $6/tonne this morning…now down seven of the past eight trading sessions. Nov canola futures are trading $5.10 lower this morning at $611.80/tonne…a brutal $55/t drop during this brief time period. Without fall season Chinese buying, our canola market is missing a critical piece of the demand picture…making a near-term break below $600/tonne appear increasingly likely.

With the ongoing trade spat between China and the United States…plus Beijing’s tariffs on Canadian canola seed, oil and meal, there won’t be a lot of oilseed exports from North America to China for now. We need value buyers to step up.

But with harvest ramping up, buyers seem intent to stand aside and watch prices erode further for now on bearish momentum trade. Seasonally, such attitudes are not too surprising, but it’s still painful to watch. But with the market very oversold, bargain hunting could be significant once confidence grows that prices have stabilized.

The weakening tone of the CBOT soy complex is not helping canola…but canola losses of late are out pacing beans and soyoil. EU rapeseed futures are also lower this morning, while Malaysian palm oil trade is flat.

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