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Happy Monday,
Sending on Monday this week since the July 4th holiday was observed Friday — markets closed Thursday and we waited for the delayed CFTC print. Acreage was the story: USDA and StatsCan both dropped Tuesday, and the Canadian canola print was a major surprise. Weak non-farm payrolls (57K vs. 115K expected) added another wrinkle to the Fed picture.
How the Week Closed
| Commodity |
Weekly Change |
| Corn (December) |
Unchanged |
| Soybeans (November) |
-8.5¢/bu |
| Canola (November) |
-$8/MT |
| Spring Wheat (Sept) |
+13.5¢/bu |
| HRW (KC) Wheat (Sept) |
+19¢/bu |
| SRW Wheat (Sept) |
+10¢/bu |
Rolled to new-crop contracts (December corn, November beans/canola). All three wheat contracts rallied on Canadian acre cut; canola sold off hard on a record acre print.
Short trading week — Thursday close. No energy commentary in this week’s discussion.
Acreage & Stocks Recap
USDA Acreage (U.S.)
| • | Corn: 95.3M acres — down 3% from last year, but still the 4th highest on record. |
| • | Soybeans: 85.4M acres — up 5% from last year. |
StatsCan Principal Field Crop Acres (Canada)
| • | All wheat: 25.3M acres — down 5.9% from last year. Supportive for wheat prices. |
| • | Canola: 23.4M acres — a new all-time record, up 8.4% from last year and above the previous 2017 record of 23M. This was the big surprise. |
U.S. Quarterly Stocks
| • | Corn stocks: up 14% year-over-year — bearish supply. |
| • | Soybean stocks: up 5% year-over-year. |
Grain Crushings (May)
Corn consumption up 9% month-over-month and up 5% year-over-year — helping keep corn from breaking lower despite the bearish stocks.
What Drove Markets This Week
Acreage report drove everything. The Canadian canola record at 23.4M acres was the surprise of the day — that’s a materially bigger supply picture than the trade was positioned for, and it’s the reason canola gave back $8/MT even with Alberta conditions deteriorating. US corn acres coming in below last year (though still historically large) was supportive enough to hold corn unchanged despite bearish stocks.
Wheat rallied across the board — Canadian all-wheat acres down 5.9% is a solid supportive input, and funds started covering short positions. HRW flipped back to net long.
Then Thursday, non-farm payrolls came in at 57K vs. 115K expected — a big miss. That’s the opposite signal from last week’s hot core PCE — a weaker labor print could pull rate-hike odds back if it starts to build a trend. Worth watching alongside inflation data going forward.
Fund Positioning (CFTC as of June 30)
Funds started covering shorts across the wheat complex and cut canola length further. Corn short trimmed slightly:
| • | Corn: Net short 67K — covered ~8K short. |
| • | Soybeans: Net long 38K — added ~1.1K. |
| • | Bean Oil: Net long 92K — down ~11K. |
| • | Meal: Net long 4.7K — down ~7.6K. Near flat now. |
| • | SRW Wheat: Net short 67.5K — covered ~2.8K. |
| • | HRW Wheat: Net long 5K — flipped back to long, ~6K swing. |
| • | HRS Wheat: Net short 7K — flipped from long, funds sold ~7.9K. |
| • | Canola: Net long just over 10K — down ~14.5K. Two straight weeks of significant reductions. |
Note: Positions as of Tuesday, June 30 — cutoff was the same day as the acreage/stocks reports. Some of this positioning is a reaction to the report itself.
Export & Demand Update
U.S. Inspections & Sales
| • | Corn: Inspections 1.786M MT (vs. 1.467M) — strong. Sales 851K, netted to 732K. New crop 767K. Total commitments now ~1M MT above USDA’s current projection — bullish carryout risk. |
| • | Soybeans: Inspections 419K MT (vs. 272K). Sales 50K, netted to 42K. New crop 182K — another decent step-up in forward book. |
| • | Soybean meal: 267K gross, netted to 239K. New crop 175K. |
| • | Wheat: Inspections 358K MT (vs. 396K). New crop sales 332K, netted to 300K. |
| • | Ethanol production: 1.117M barrels/day (vs. 1.09M). Margins still solid. |
Canadian Exports & Domestic Use
| • | Canola exports: 258K MT — big pickup from last week’s 70K. Domestic disappearance 224K MT (down from 294K). |
| • | Wheat exports: 659K MT — big week. Domestic use 90K MT. |
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Processor Margins Still Strong
Canola board November: $335/MT — weak CAD (approaching ~$0.70 USD/CAD) still propping the margin. Soybean crush August: $2.70/bu. Ethanol margins solid with production at 1.117M barrels/day.
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U.S. Crop Conditions
| • | Winter Wheat Harvest: 48% (vs. 5-yr avg 39%, vs. 34% last week) — racing. |
| • | Spring Wheat conditions: 59% G/E — up 5 points W/W, well above last year’s 53%. |
| • | Corn: 9% silking (vs. 6% 5-yr avg, ahead of last year). Conditions 67% G/E (unchanged) vs. 73% last year. 2% moved from “good” to “excellent,” 1% fell out of good. |
| • | Soybeans: 19% blooming (vs. 15% 5-yr avg). Conditions 65% G/E (down 1 point W/W). |
Eastern Corn Belt has been under high heat with no overnight relief — drying up topsoil. Break in the heat expected over the weekend, back to normal next week. Any hit to soil moisture will show up in next week’s conditions report.
Canadian Crops: Two-Speed
| • | Saskatchewan: Improving. Oilseeds 79% G/E (up 4 points W/W). Wheat 85.5% G/E (up ~5 points W/W). |
| • | Alberta: Deteriorating. Spring wheat ~70% G/E (down 2 points). Canola 57% G/E (down significantly). All major crops 65.9% G/E vs. last week’s 69.4%. |
Alberta is where the heat and dryness are biting. Western Canada broadly has high temps with a dry bias — and the risk is that plants got spoiled by continuous rains earlier, so roots didn’t push deep. Now if topsoil dries out, they don’t have deep reserves to draw on. Watch overnight temps.
Canola Watch: Narrative Shift
The record 23.4M acre print changes the story. For weeks the canola thesis has been “tight S&D, late-developing crop, El Niño yield risk in July.” That’s still true on the yield side — Alberta canola conditions just dropped to 57% G/E, and the July heat is arriving on schedule. But the supply side just got materially bigger.
Now the market has to weigh acres vs. yield. A record 23.4M acres times a hit-yield year could still produce a tight S&D. A record acre year with average-to-good yields is a very different picture. That’s the tug-of-war the futures are pricing over the next 6–8 weeks.
Funds cut canola long another 14.5K on Tuesday. Long positioning has been reduced by roughly 75% from the recent peak. If yield concerns intensify, there’s room to add length back — but the market is going to need real evidence, not just weather forecasts.
Bright spot: Canadian canola exports jumped to 258K MT this week (from 70K) and the crush is still running hot. Demand side still supportive; supply side just got harder.
What to Watch Ahead
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Eastern Corn Belt Heat Aftermath
Next week’s crop conditions will show what the heat & overnight dryness did to topsoil. Corn silking is at 9% — approaching the critical window.
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Western Canada & Alberta Deterioration
Alberta canola down to 57% G/E is the key data point. Watch overnight temps and any rain systems — shallow-rooted plants are exposed if the dry bias holds.
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Fed Path: Payrolls vs. PCE
Weak 57K payroll print is dovish; last week’s 3.4% core PCE was hawkish. Mixed signals. Next inflation and labor prints will matter — rate-hike odds could reprice quickly.
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July WASDE
Next WASDE will fold in the acreage numbers. Watch for how USDA adjusts corn ending stocks given the ~1M MT of export commitments over current projection, and any yield-side changes based on current conditions.
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Bottom line: Canadian canola record acres reset the supply narrative — but Alberta conditions are pointing the other way. Wheat got acre-side support. Weak payrolls muddied the Fed picture. Weather is the deciding variable now. Preserve profit and protect when you can. No one ever went broke making money.
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Have a great week and reach out with any questions.
Stephen
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