The USDA releases its prospective plantings report on March 31, providing the first survey-based estimates on the upcoming U.S. growing season.

The trade sentiment ahead of the report is for a three-to-five-million-acre reduction in corn area from the 98.8 million acres grown in 2025 and a similarly sized increase in soybeans from the 81.2 million acres grown last year. Rising fertilizer costs due to the war could see even more area shift to soybeans.

Soybean/corn ratio

The soybean/corn ratio is calculated by dividing the soybean futures price by the corn futures price, with a number above 2.5 historically seen as favouring planting soybeans and a ratio below that tipping the scales to corn.

With May soybeans settling at US$11.7175 and corn at US$4.6725 on March 25, the ratio works out to 2.51 — slightly favouring soybeans.

However, the localized cash bid ratios across the countryside are more varied. Looking at a sampling of elevators in Illinois and Iowa the local soybean/corn ratios range from 2.35 to 2.65, meaning seeding corn looks more favourable in some areas and soybeans in others.

The high fertilizer costs and other metrics are also not caught in the ratio, which should keep speculation on the annual fight for acres at the forefront of the trade in the coming weeks.

Charts

May corn has traded in a range of US$4.40 to US$4.76 per bushel since the Middle East war started on Feb. 28. Fund traders added to the bullish bets, to sit on their largest net long in corn since February 2025 at about 230,000 contracts. The trend is still higher in corn, as that market looks to keep too many acres from flipping to soybeans.

May soybeans settled at US$11.7075 per bushel on Feb. 27, the day before the U.S. and Israel first attacked Iran and hit a session high of US$12.3875 per bushel two weeks later. However, the contract was right back where it started by March 25.

The latest report was for the week ending March 10, which was 11 days into the United States and Israel’s conflict with Iran.

Funds have now become long not only in the vegetable oil complex, but also for corn. Even the “permanent” bearish fund position in wheat has been partially lifted.

There is no question the vegetable oil complex has benefited the most from the conflict in the Middle East. This is due to the link between crude and vegetable oil values.

The link has pushed funds to add to their existing long position in soybeans, soybean oil and canola.

Funds added a net of 33,815 contracts to their recently accumulated long position in canola.

The fund position on March 10 stood at a net long of 95,162 contracts, which is the equivalent of 1.9 million tonnes. This the longest fund position that funds have held in canola since the last week of July 2025.

Funds are also long soybean oil futures, with purchases last week amounting to a net long of 33,329 contracts. This pushed the fund soybean net oil position to 108,838 contracts, which amounts to 2.97 million tonnes of soybean oil.

Soybean futures have been rising since the rumours of a China agreement in early February.

Managed money funds have been long soybean futures since the end of the 2025 harvest but are now holding a record net long position for this time of year.

Funds during the past week added a net 23,205 contracts to their long position. The total fund long on March 10 was 222,107 contracts, which amounts to 1.11 billion bushels.

Grain markets have not fared as well since the start of the war, but funds have also turned to the long side of the ledger in wheat and corn.

Corn markets have benefitted from fund positioning as they added 140,297 contracts to their long position last week. On March 10, funds held a total net fund position of 193,271 contracts, which is the equivalent of 966 million bu.

Even wheat markets have benefited from fund buying with Minneapolis and Kansas City futures in a net long position.

On March 10, funds were net long 15,990 and 9,425 contracts in Minneapolis and Kansas City, respectively. Funds remain net short in Chicago and held a net short of 22, 345 contracts.

This puts funds in a small net long in total wheat contracts.

What does it mean?

Funds are taking a long position in most commodities, which is helping boost prices. Essentially, the fund positioning is adding to the war premium for these commodities.

The only issue is that fund positions can rapidly move from long to short, depending on their sentiment toward the commodity.

Look for funds to remain on the bullish side of the market until the war is over and the Strait of Hormuz is opened for all commercial traffic. When this happens is anybody’s guess.

Why it matters: A large fund position can sway the futures markets

The net managed money long position in canola futures came in at 110,658 contracts as of March 17 (135,694 long/25,036 short), up by about 18,000 contracts on the week due to a combination of short covering and new longs going on the books. That marked the largest net long position since July 2025.

Total open interest in canola futures increased to 364,317 contracts from 352,531 the previous week.

U.S. futures

Fund traders reduced their net long position in soybeans at the Chicago Board of Trade by roughly 16,000 contracts, with the net long dipping to about 195,200 contracts. That was the first contraction after six previous weeks of increases.

The net short position in corn came in at about 230,800 contracts on March 17, up by 32,000 contracts on the week.

In wheat, the Chicago soft wheat market reported a net short position of 11,900 contracts — down by about 10,000 contracts from the previous week.

Hard red winter wheat posted a net long of about 11,300 contracts. In MIAX spring wheat, the managed money net long position came in at about 15,300 contracts.

Why it matters: A large fund position can sway the futures markets

The net managed money long position in canola futures came in at 26,844 contracts as of Feb. 24 (71,072 long/44,228 short), up by about 21,000 contracts on the week due to a combination of short covering and new bullish bets going on the books. That marked the largest net long position since August 2025.

Total open interest in canola futures dipped to 296,019 contracts from 305,730 the previous week.

U.S. futures

Fund traders grew their net long position in soybeans at the Chicago Board of Trade by roughly 12,000 contracts, with the net long rising to about 171,400 contracts.

The net short position in corn came in at about 13,200 contracts on Feb. 24, down by 30,000 contracts on the week.

In wheat, the Chicago soft wheat market reported a net short position of 17,800 contracts — down by about 52,000 contracts from the previous week as bullish chart signals had speculators covering short positions and putting on new longs.

Hard red winter wheat moved from a net short of about 11,100 to a net long of 6,300 contracts. That marked the first net long fund position for the market in two-and-a-half years. In MIAX spring wheat, the managed money net short position was cut from about 18,700 contracts to 9,800.

The top five buyers are China with 1.45 million tonnes in the August to December period, followed by Bangladesh at 1.02 million, Japan at 900,000, Indonesia at 850,000 and Colombia at 490,000. China and Bangladesh are both taking much more than last year.

Durum exports are also solid, running slightly behind last year’s pace but still on track to meet the forecast for full year exports of 5.35 million tonnes.

In the last two years, the export pace in the second half of the year was stronger than in the first, and if that is repeated this year, then there is a chance to exceed the record, which was 29.2 million tonnes of wheat and durum.

That is good news because there is a record large wheat crop to move.

All that grain means that even with a strong export pace, Agriculture and Agri-Food Canada expects burdensome ending stocks of six million tonnes of wheat and 1.5 million tonnes of durum, for a combined all-wheat total of 7.5 million.

That would be the most since the record 10.4 million tonnes all-wheat carry-over in 2013-14, which was also a year with a massive wheat crop.

I think it will be good to sell as much of the 2025-26 crop as possible within this crop year because global competition could heat up in 2026-27.

Around the world

On the geopolitical front, if negotiations to end the war in Ukraine are successful, it would put downward pressure on wheat prices.

On the fundamental supply and demand side, it is early to make heavy bets on crops that are months from harvest, but signs point toward a good global crop in 2026.

On Feb. 13, the IKAR consultancy that monitors Russian grain crops increased its forecast for 2026-27 wheat production to 91 million tonnes, up from 88 million previously.

The new forecast is close to what was produced last season, according to the official Russian estimate of 91.4 million tonnes.

This IKAR forecast is higher than SovEcon’s outlook, but the latter recently increased its number by 2.1 million tonnes to 85.9 million on favourable weather.

IKAR forecasts that 2026-27 wheat exports could reach 47.5 million tonnes, up from a projected 46 million in the current year.

The winter wheat crop in the United States is still in dormancy but is in fairly good shape.

The estimate of combined seedings of hard and soft winter wheat is 32.99 million acres, down less than one percent from the previous year’s 33.15 million.

Kansas, the largest American hard red winter wheat producer. reported in early February its crop was 61 per cent good to excellent, 29 per cent fair and 10 per cent poor to very poor.

That is better than last year when it was 50 per cent good to excellent, 36 per cent fair and 14 per cent poor to very poor and 2024-25 when the numbers were 54 per cent, 31 per cent and 15 per cent.

This year, the U.S. Drought Monitor map shows almost no drought in Kansas, which is rare.

Oklahoma and Texas, two other important hard red winter wheat states, are drier than they were last year at this time. Those states will start reporting crop conditions in March.

Spring wheat seeding is more than a month away, but U.S. producers in the northern Plains are happy that most of the spring wheat areas in the Dakotas, eastern Montana and western Minnesota are drought free.

The USDA forecasts that American wheat stocks at the end of the current year will rise, as they are expected to do in Canada. The department sees ending stocks at 25.34 million tonnes, close to two million tonnes more than last year and the most since 2019-20.

France’s winter crops are doing well. FranceAgriMer says conditions are the best in three years with 91 per cent of soft wheat and 87 per cent of durum rated good to excellent.

The Mediterranean Sea area has seen more rain than normal this season. Spain has seen some flooding but generally moisture is good for crops. Italy also has ample moisture.

North Africa, an important destination for Canadian durum, has also had much better rain this season.

Morocco expects its wheat and durum crops will total eight to nine million tonnes, about double last year’s production.

This signals that durum demand in 2026-27 might be weaker.

India is expecting a record winter crop thanks to good moisture from the monsoon and increased seeded area. The country is ending its ban on wheat exports, which was instituted after the poor crop of 2022.

Why it matters: A large fund position can sway the futures markets

The net managed money long position in canola futures came in at 7,663 contracts as of Feb. 17 (59,074 long/51,409 short). That compares with the previous week when the speculative position was evenly balanced, as managed money traders put on more fresh longs than shorts during the week. The net fund position was last in positive territory in September 2025.

Total open interest in canola futures increased to 305,730 contracts, from 247,124 the previous week.

U.S. futures

Fund traders grew their net long position in soybeans at the Chicago Board of Trade by roughly 43,000 contracts, with the net long rising to just under 159,000 contracts.

The net short position in corn came in at about 42,300 contracts on Feb. 17, down by 15,200 contracts on the week.

In wheat, the Chicago soft wheat market reported a net short position of 69,600 contracts. The net short in hard red winter wheat came in at roughly 11,100 contracts. In MIAX spring wheat, managed money traders were holding a net short of around 18,700 contracts as of Feb. 17.

Why it matters: A large fund position can sway the futures markets

The net managed money short position in canola futures came in at 42,379 contracts as of Feb. 3 (40,584 long/82,963 short). That was down by about 10,000 contracts from the previous week on a combination of short covering and new longs going on the books. It marks the smallest net short in canola in two months.

Total open interest in canola futures increased to 296,432 contracts, from 254,979 the previous week.

U.S. futures

Fund traders grew their net long position in soybeans at the Chicago Board of Trade by roughly 10,000 contracts, with the net long rising to just over 29,000 contracts from about 19,800 the previous week.

The net short position in corn came in at about 80,600 contracts on Feb. 3, holding relatively steady on the week.

In wheat, the Chicago soft wheat market reported a net short position of 81,500 contracts. The net short in hard red winter wheat came in at roughly 7,800 contracts. In MIAX spring wheat, managed money traders were holding a net short of around 20,800 contracts as of Feb. 3.

Corn and wheat futures held near unchanged.

The U.S. Department of Agriculture this week confirmed that China bought more than 1.5 million tonnes of American soybeans. Traders said they had largely expected deals of that size before the USDA reported them, and they had factored China’s buying into the market already.

“They buy, and it’s already behind us,” said Don Roose, president of U.S. Commodities in Iowa.

The January soybean contract on the Chicago Board of Trade was 2-1/2 cents higher at $11.25 a bushel at the close. That was down from Tuesday’s peak of $11.69-1/2, the highest since June 2024.

China’s soybean purchases remain far off the 12 million tonnes that U.S. officials said it promised to buy by year-end. The U.S. also faces tough competition for global export sales from cheaper soybeans in Brazil, analysts said.

Some traders said China could bear the cost of making larger purchases of U.S. soybeans in order to preserve the trade truce agreed with Washington in late October but expected the market to remain cautious until volumes are confirmed.

“We wouldn’t be surprised if Chinese purchases from the U.S. are closer to a trickle than a flood,” said Rod Baker, an analyst at Bendigo Agribusiness Insights.

The USDA reported on Thursday that China also bought 132,000 tonnes of U.S. white wheat. The deal failed to spark a strong rally in CBOT wheat futures as global supplies were plentiful, traders said.

CBOT March wheat was down one cent at $5.39 a bushel, while March corn futures dipped 1/4 cent to $4.37-1/2 a bushel.

— Reporting by Tom Polansek, Peter Hobson and Gus Trompiz

Why it matters: A large fund position can sway the futures markets

Reporting was halted during the 43-day shutdown that began Oct. 1, and backdated reports will be released twice a week over the next two months until the data is current by late January.

The net managed money long position in canola futures came in at 13,741 contracts as of Sept. 30 (47,649 long/61,400 short). That was up by about 9,000 contracts from the previous week and marks the largest net short in canola since April.

Canola futures trended steadily higher during the data blackout — a sign that the speculative money moved back to the long side in the oilseed.

Fund traders were also short soybeans at the Chicago Board of Trade ahead of the government shutdown. The net short of about 31,600 contracts in soybeans as of Sept. 30 was the largest short position since early August. Soybean futures also moved higher since late September.

The net short position in corn came in at about 129,300 contracts on Sept. 30.

In wheat, the Chicago soft wheat market reported a net short position of 96,200 contracts. The net short in hard red winter wheat came in at roughly 54,100 contracts. In MIAX spring wheat, managed money traders were holding a net short of around 26,200 contracts as of Sept. 30.

The Canadian Grain Commission reported wheat exports for the week ended Oct. 12 at 710,500 tonnes, well ahead of the 420,900 tonnes shipped the previous week. So far this marketing year, 4.282 million tonnes of wheat were shipped for export, a new record for this time of year, compared to 3.749 million the year before.

The CGC also reported that 80 per cent of its CWRS samples were in the top grade, while another 18 per cent were graded No. 2. However, the Canadian Western Amber Durum (CWAD) crop saw 22 per cent making the top grade, 27 per cent at No. 2 and 37 per cent at No. 3.

CWRS wheat was down C$2.10 to up C$4.90 per tonne, according to price quotes from a cross-section of delivery points compiled by PDQ (Price and Data Quotes). Average prices were between C$239.60/tonne in southeast Saskatchewan to C$266.10 in southern Alberta.

Quoted basis levels ranged from between C$37.70 to C$64.20/tonne above the futures when using the grain company methodology of quoting the basis as the difference between the U.S. dollar denominated futures and the Canadian dollar cash bids.

Accounting for exchange rates and adjusting Canadian prices to U.S. dollars (C$1=US$0.7118), CWRS bids were from US$170.50 to US$189.40/tonne. Currency adjusted basis levels ranged from US$12.50 to US$31.40 below the futures. If the futures were converted to Canadian dollars, basis levels would be C$8.90 to C$22.30 below the futures.

Meanwhile, CPRS prices were up C$3.50 to C$6.10 per tonne. The lowest average bid for CPRS was C$216.30 in southeast Saskatchewan, while the highest average bid was C$240.10 in southern Alberta.

The average prices for CWAD were unchanged to up C$0.70 per tonne with bids between C$277.40 in northwest Saskatchewan to C$291.90 in western Manitoba.

The December spring wheat contract in Minneapolis, which most CWRS contracts are based off of, was quoted at US$5.4950 per bushel on Oct. 16, down 7.5 cents.

The Kansas City hard red winter wheat futures, which are now traded in Chicago, are more closely linked to CPRS in Canada. The December contract was down one cent at US$4.8875/bu.

The December Chicago soft red contract lost four cents at US$5.0250/bu.

The Canadian dollar declined one-quarter of a cent to close at 71.18 U.S. cents on Oct. 16.