|
Happy Friday,
Wednesday’s WASDE flipped the entire complex bullish, geopolitical premiums continue to do real work in wheat and energy, and the canola supply story is getting harder to ignore. Here’s everything that matters and what we’re watching next.
How the Week Closed
| Commodity |
Weekly Change |
| Corn (December) |
+21.25¢/bu |
| Soybeans (November) |
+16.25¢/bu |
| Canola (November) |
+$38.30/MT |
| Spring Wheat (December) |
+2¢/bu |
| Winter Wheat (September) |
+40¢/bu |
| Soft Red Wheat |
+35¢/bu |
| Crude Oil (front-month WTI) |
+$4.13/bbl |
| Heating Oil (ULSD) |
+25.5¢/gal |
All green this week. The post-WASDE reversal, diesel supply concerns out of Russia, and escalating Middle East tensions drove broad-based strength.
What Drove Markets This Week
|
WASDE — the week’s headline
Combined corn and soybean acres came in at a record. USDA dropped the corn yield — which is what our models predicted — and also trimmed bean yield slightly, where we had it unchanged. Higher acres still lifted total production, but the demand side is doing the work: corn ending stocks fell on increased overall usage, tighter both old and new crop. Soybeans are tighter this year, with new-crop ending stocks up marginally enough to call unchanged. U.S. wheat ending stocks tightened, Canada loosened somewhat, and the world number came in slightly higher month over month — but that last part is misleading.
|
The world wheat stocks increase isn’t coming from better production — it’s coming from reduced world trade. When two of the world’s largest wheat exporters can’t reliably move product, those stocks sit unsold and unprocessed. That’s the mechanic the print is reflecting, and it’s exactly why futures ran the way they did.
U.S.–Iran: Reports of an easing at the end of last week quickly fell apart. Iran has stated it doesn’t really intend to de-escalate, and the U.S. has reportedly sent another aircraft carrier to the strait. ULSD up 25.5¢/gal on the week tells you the market isn’t pricing in resolution any time soon — diesel supply concerns out of Russia are compounding the pressure.
Russia–Ukraine: Ukraine proposed, via Turkey, a moratorium on targeting civilian infrastructure around the Sea of Azov and Black Sea. The timing matters — it followed Ukrainian strikes on Russian refineries and terminals. Russia essentially dismissed it, saying they’ve received nothing official from the Turkish reps and characterizing the proposal as Ukraine buying time to replenish its arsenal. An agreement looks unlikely. These are two of the world’s most significant wheat producers and exporters, and the longer their ability to move product is in question, the more premium North American wheat accumulates.
Australia & the EU — canola supply tightening globally. Hail and frost hit parts of Western Australia with preliminary reports pointing to upwards of 50% yield loss in some areas. Meanwhile, the EU revised rapeseed and corn production lower. The EU is looking at roughly 500,000 tonnes of canola imports from Canada, but its base of Australian seed is where things get tight: if Australian losses are real and EU production keeps sliding, the world canola/rapeseed S&D is starting to narrow meaningfully. Layer on the WASDE’s 22.5 MMT Canadian production print — if that doesn’t fully materialize, futures and basis will remain strong.
Fund Positioning — CFTC Managed Money
| Contract |
This Week |
Last Week |
W/W Change |
| Corn |
+125.9K |
+144.8K |
−18.9K |
| Soybeans |
+109.0K |
+132.4K |
−23.4K |
| Bean Oil |
+79.0K |
+78.7K |
+251 |
| Soybean Meal |
+73.7K |
+77.8K |
−4.1K |
| SRW Wheat |
−33.4K |
−24.9K |
−8.5K |
| HRW Wheat |
+25.6K |
+31.5K |
−5.9K |
| HRS Wheat |
+9.8K |
+8.8K |
+1.0K |
| Canola |
+56.6K |
+69.4K |
−12.8K |
Contracts, net. Last-week column implied from reported week-over-week changes.
|
Read this report with the calendar in mind
This data is as of Tuesday. The WASDE landed Wednesday and triggered buying across the complex. A meaningful portion of these net-long reductions were likely reversed the very next day. Next week’s report will tell the real story.
|
U.S. Export & Demand Update
Export inspections (as of August 10)
| • | Corn: 1.740 MMT, down from 1.887 MMT — a step back but still a solid print. |
| • | Soybeans: 399K MT vs. 347K MT — gaining some traction. |
| • | Wheat: 421K MT vs. 338K MT — big jump week over week, and the geopolitical premium is showing up in actual demand flow, not just futures. |
Export sales
| • | Corn: 439K MT gross (411K net). New crop at 950K MT. |
| • | Soybeans: 83K MT gross (75K net), but the new-crop number is the story: 1.762 MMT, driven by a string of Chinese purchases coming through over the past several weeks. That’s meaningful forward demand. |
| • | Soybean cake & meal: 101K MT gross (69K net). New crop 180K MT (149K net). |
| • | Wheat: 328K MT gross (256K net) — a solid pick-up that supports the price action we saw this week. |
Canada — officially into the new crop year
Canola exports at 231K MT, wheat at 519K MT. Domestic disappearance: canola 252K MT, wheat 129K MT. Early numbers to set the baseline as the new marketing year gets underway.
Ethanol: 1.117 million barrels per day, up from 1.107M. Production picked up alongside the energy move, but the pop in corn narrowed margins to close out the week — a useful reminder of the feedback loop between corn price strength and processor economics.
Processor Margins
|
Canola
Board crush over $286/MT on November. The margin has been squeezing for a few weeks, but these are still massive levels — far from a demand concern. What’s driving it: a firmer CAD (strong jobs report, oil holding its price, USD weakness) plus a tightening seed S&D. Canola seed futures outpaced the bean oil and meal moves this week — the seed is doing the heavy lifting, the opposite dynamic from soybeans.
|
|
Soybeans
Board crush at $2.68/bu on September and $2.54/bu on October, essentially flat week over week. The seed barely moved this week, which is exactly the opposite of what happened in canola — the margin held because there wasn’t much bean price action to compress it.
|
U.S. Crop Progress & Conditions
Wheat
Winter wheat harvest at 91%, right on the five-year average (89% last year). Spring wheat harvest is running well ahead at 24% vs. a 19% average and 14% last year — but conditions dropped hard: 51% good-to-excellent, down 4 points (4% out of good, 3% into poor, 1% into very poor). The speed of that condition decline is worth watching.
Corn
Silking at 94%, dough at 61% (vs. 55% average), dented at 16% (vs. 12% average) — running ahead of both average and last year on maturity. Conditions held at 61% good-to-excellent, unchanged week over week with no category shifts. After several weeks of declining conditions, that stabilization is a positive signal, though still well below last year’s 72%.
Soybeans
Blooming at 93% (91% avg), pod setting at 74% (69% avg) — both ahead of pace. Conditions slipped to 62% good-to-excellent, down 1 point (1% from good into poor), vs. 68% last year. A small move, but the trend is still lower.
Western Canada
Saskatchewan topsoil moisture continues to deteriorate: 1% surplus, 49% adequate, 50% short or very short. Moisture is getting worse, not better, through the province.
|
Overnight frost risk is live across most of Western Canada
Saskatchewan overnight lows are holding for now, but many areas are approaching zero and negative territory. Temperatures will keep falling over the coming weeks. The intersection of harvest progress and declining temps is the key variable to track from here.
|
Alberta
Spring wheat at 64.9% good-to-excellent (up ~1%), canola at 50.2% (up fractionally). All major crops slipped again to 58.7% vs. 60.3% the prior week. All crops (broader measure) held at 60.3%.
|
Alberta released provincial yield estimates
Canola dryland at 37.7 bu/ac, spring wheat dryland at 53.9 bu/ac — above the five- and ten-year average index, and more in line with what some of us have been predicting than what WASDE or AAFC have shown.
Historical context matters here. Last year at this time, Alberta reported dryland canola at 38.9 and wheat at 49.4 — but by the final estimate in early October, canola had jumped nearly 4 bu/ac and wheat 6 bu/ac. It’s a good starting point, but these estimates have historically moved significantly higher by season’s end.
|
How We’re Thinking About This
Wheat is where the geopolitical premium lives. It’s already showing up in basis and in futures, and there’s a genuine demand case for North American wheat as long as Russia and Ukraine’s export capacity stays in question. But recognize what these premiums are — they’re conflict-driven and they can evaporate on a single headline. One official response to the moratorium proposal, one change in the news cycle, and a lot of this comes out. That’s why a well-structured risk management plan matters even more at elevated levels.
The global canola story keeps building. EU rapeseed already tight, Australian losses now compounding it, and the Canadian seed S&D getting tighter. That combination sets up for basis appreciation in Canada. The crush margins back this up — even with the squeeze, they’re still massive, meaning demand isn’t going anywhere.
On corn, watch the pattern. Historically, USDA tends to print a similar-looking yield in September as they did in August. Meanwhile, if EU corn takes further hits, that’s incremental demand for U.S. exports — which tightens the ending stocks story from the other side. Add in the wheat–corn correlation: as wheat pushes higher on the conflict premium, it tends to pull corn along, and vice versa.
|
China remains the wild card
Canada–U.S. geopolitical risk feels low right now, but China can change that equation quickly — which is exactly why being well hedged matters when you can’t predict the event. The tariff on meal and peas is set to expire at year-end 2026 — keep watching for any signals on whether it extends or truly sunsets.
|
What to Watch Ahead
|
Pro Farmer Crop Tour — starts Monday
The market follows the tour closely and uses the yield estimates out of the Midwest producing states to stress-test their own models. Expect the tour data to be a key price driver next week — particularly with corn conditions at 61% G/E and the WASDE already cutting yield.
|
|
Russia’s response to the moratorium
This is binary: a positive response pulls the war premium out of wheat. No response or dismissal and we could see these prices continue to build. Position accordingly.
|
|
Middle East — energy headline risk
Another aircraft carrier deployed to the area. Any escalation feeds directly into energy, which feeds into oilseed crush economics. De-escalation releases the premium. Either way, it moves.
|
|
Harvest progress vs. historical norms
We’re honing in on this now. Any material deviation from historical pace sends the market running — not as a yield predictor, but because the industry starts repricing flow timing. A slow harvest means nearby premiums get bid up as buyers scramble for coverage; a fast one means supply hits the market ahead of schedule and pressures spreads. This is where basis and spread insight comes from.
|
|
Bottom line: The WASDE tightened the corn story, the geopolitical premiums in wheat and energy are doing real work, and the global canola supply narrative keeps getting tighter. These premiums can leave as fast as they arrive on one headline. If these values work for your operation, preserve and protect them. No one ever went broke making money.
|
Have a great week and reach out with any questions.
Stephen
|