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Happy Friday,
The September WASDE landed Friday, energy crossed $100 for the first time since May as the Middle East escalation widened, and the ag complex gave back ground on the week as the market digested loosening world wheat and canola balance sheets alongside a corn-friendly report. A lot to unpack — here’s how it all connects.
How the Week Closed
| Commodity | Weekly Change |
| Corn (December) | −6.25¢/bu |
| Soybeans (November) | −13.25¢/bu |
| Canola (November) | −$4.70/MT |
| Spring Wheat (December) | Unchanged |
| Hard Winter Wheat (December) | −3.25¢/bu |
| Soft Red Wheat (December) | −8.25¢/bu |
| Crude Oil (front-month WTI) | +$9.15/bbl |
| Heating Oil (ULSD) | +46¢/gal |
Energy is the standout: WTI back over $100/bbl for the first time since mid-May, ULSD over $5/gal for the first time since spring 2022. The ag complex pulled back, with spring wheat the lone hold at unchanged.
USD index at 99.123 (down slightly w/w). CAD/USD at 1.3868, slightly weaker w/w.
What Drove Markets This Week
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September WASDE — corn got tighter, beans got a bump, wheat loosened
Corn: USDA cut yield by 2.2 bu/ac — slightly bigger than our model’s expectation by 0.7 bu/ac, but within the trade estimate range. Production dropped 200 million bushels, tightening ending stocks to 1.567 billion bushels (80 million below August). Beginning stocks were also lowered. World corn production cut by 5.9 MMT. This is a corn-friendly report.
Soybeans: yield bumped 0.1 bu/ac — our model had it nearly unchanged to a slight cut, but USDA went the other way. Production up 16 million bushels. Despite that, ending stocks still fell to 310 million bushels (from 320M) on increased exports. The demand side is doing enough work to tighten the balance even with a higher yield.
Wheat (world): higher ending stocks, driven by production increases — Australia +3 MMT, Canada +1 MMT, Ukraine +6.6 MMT on a record yield. But WASDE also reported higher consumption and lower trade due to the Russia–Ukraine conflict. The higher ending stocks are misleading: that production is largely in countries that can’t reliably export it. We read this as a potential for higher demand directed to non-conflict countries like the U.S. and Canada, which is what the wheat inspections data has been showing.
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World rapeseed was raised 1.9 MMT on increases from Australia, Russia, Kazakhstan, and Uruguay. Notably, WASDE made no changes to Canadian canola — holding at 22.5 MMT. In itself, that’s a call-out: given what we’re seeing on the ground in Western Canada, that number will be worth revisiting.
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Middle East — a wider escalation with real trade implications
Multiple tankers were hit in the Iran conflict. But the newer and more significant input is the Iran-backed Houthi offensive in Yemen, which is attempting to control the Red Sea coast at the southern tip of the Middle East. This directly threatens the Bab al-Mandeb Strait, which feeds into the Suez Canal and carries over 8 million barrels of shipping per day — roughly 14% of global maritime trade and about 25% of global container shipments.
This is why energy ran over $100/bbl and ULSD cracked $5/gal. The U.S. responded with new sanctions targeting Iran’s aviation sector and its international suppliers — an attempt at deeper economic isolation by cutting off maintenance and parts supply. This is a greater escalation in maritime trade risk, and the cost implications extend well beyond energy into global shipping and commodity flows.
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Fund Positioning — CFTC Managed Money
The positioning picture is mixed this week. Funds continued adding to corn and soybeans but sold bean oil, trimmed SRW significantly (−10K contracts after flipping long just last week), and held wheat classes relatively flat. The adds are moderating compared to the massive builds of the prior three weeks — consistent with the market pausing to position ahead of the WASDE.
| Contract | This Week | Last Week | W/W Change |
| Corn | +414.5K | +401.0K | +13.5K |
| Soybeans | +257.3K | +235.0K | +22.3K |
| Bean Oil | +91.7K | +99.8K | −8.1K |
| Soybean Meal | +157.7K | +157.2K | +510 |
| SRW Wheat | +4.9K | +14.9K | −10.0K |
| HRW Wheat | +48.7K | +48.8K | −150 |
| HRS Wheat | +22.3K | +20.9K | +1.5K |
| Canola | +110.8K | +104.3K | +6.5K |
Contracts, net. Data as of Tuesday — the WASDE-day trade on Friday is not reflected here.
U.S. Export & Demand Update
Export inspections (as of September 3)
| • | Corn: 1.662 MMT vs. 1.498 MMT — another big week that supports the tightening ending stocks story. |
| • | Soybeans: 422K MT vs. 284K MT — a bounce. |
| • | Wheat: 342K MT vs. 432K MT — a step down, but still healthy in context of the global supply disruption redirecting trade. |
Export sales
| • | Corn: a big 2.047 MMT gross (1.929 MMT net). With WASDE confirming tighter U.S. corn, the export demand is a signal the world is pricing in the supply picture. |
| • | Soybeans: 64K MT gross (net −175K MT on continued rolling). New crop: 2.694 MMT — a fifth or sixth consecutive week of massive new-crop sales. The consistency of this buying program at scale is the most bullish demand signal in the soybean market right now. |
| • | Soybean cake & meal: 59K MT gross (42K net). Next marketing year at 290K MT. |
| • | Wheat: 224K MT gross (194K net) — a low number relative to what the conflict premium and redirection of trade would suggest. Worth watching. |
Canada: no reports on exports or domestic disappearance available at the time of this report.
Ethanol: 1.099 million barrels per day, down from 1.110M last week.
Processor Margins
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Canola — holding steady despite cross-currents
Board crush over $308/MT on November. Bean oil pressure after the WASDE compressed the margin, but seed futures also faced pressure, which offset it and held the board relatively steady into the close. The margin has tracked $286 → $305 → $320 → $300 → $308 over the past five weeks — volatile but consistently above levels that incentivize crush.
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Soybeans — meal holding the margin up
Board crush at $2.20/bu on October and $2.46/bu on December — an increase week over week. Meal held its value through the WASDE-day pressure, outpacing the move down in bean oil. The product-side economics are increasingly being driven by meal rather than oil.
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U.S. Crop Progress & Conditions
Crop conditions are becoming a less significant driver as the weather has already done its damage to the national corn yield (confirmed by today’s WASDE cut), and soybeans are actually looking good on development. The focus is shifting to harvest progress and whether supply is reaching the market on the timeline commercials need to execute.
Spring Wheat
Harvest at 86%, ahead of the 83% average and 83% last year.
Corn
Dented at 76% (72% avg), mature at 25% (23% avg). Harvest has started at 5% vs. a 3% average and 4% last year — slightly ahead. Conditions slipped another point to 56% good-to-excellent (vs. 68% last year). The same pattern continues: 1% moved from good into excellent, but 2% dropped out of good and 1% into fair. The best acres keep getting better while the marginal ones keep falling off — now a five-week trend.
Soybeans
Dropping leaves at 26% (20% avg). Conditions unchanged at 58% good-to-excellent with no category shifts, vs. 64% last year. After the 2-point drop last week, this stabilization is notable — the damage may be largely done for beans.
Western Canada
Saskatchewan topsoil moisture jumped again: 33% surplus, 58% adequate, just 9% short or very short. Another big shift from last week’s 11/64/25 — more moisture than anyone needs right now, and it’s grinding harvest to a near standstill.
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Harvest is now critically behind — and we’re watching for acre loss
Saskatchewan: all crops at 27% harvested vs. a 58% five-year average and 50% ten-year average. Spring wheat at 13%, canola just over 9% — both doubled from last week, but still dramatically behind pace. Minimum temps at 2.5°C. Alberta: all major crops at 17.7%, all crops at 21% vs. a 43.5% five-year average and 32.8% ten-year average. Spring wheat at 14.1%, canola at just 2%. Manitoba: further along at 28% overall, canola 15%, spring wheat 54%.
With the slow harvest and consistent weather preventing progress, yield is becoming more established at this point. The next catalyst to watch is now potential acre loss from the weather situation across Western Canada. That would be a supply-side development the market is not pricing in.
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Provincial yield estimates — the trend is still lower
Alberta: spring wheat at 53.1 bu/ac (down from 53.7 → 53.9 earlier), canola at 37.0 bu/ac (down from 37.5 → 37.7). Both continue trending lower, the opposite of the historical pattern where Alberta estimates climb toward the October final print.
Manitoba: canola averaging roughly 43.5 bu/ac.
Canadian canola estimate from government reports: sitting at approximately 38.4 bu/ac. For context, WASDE held Canada at 22.5 MMT — any revision to that number off the back of the harvest delays and yield declines would be the next major price driver for canola.
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How We’re Thinking About This
Corn has its own story. Lower world production (−5.9 MMT), the 2.2 bu/ac U.S. yield hit, and tighter ending stocks — the WASDE confirmed the bull case. Corn can get pulled around by wheat, but the underlying fundamentals are supportive in their own right.
Wheat is still conflict-premium territory. The WASDE’s higher world ending stocks — driven by Australian, Canadian, and Ukrainian production increases — combined with the ABARES confirmation gave wheat some mean reversion this week. We’d like to see it settle a bit more before making the next major move. The wheat did come under pressure after the WASDE but managed to recover from its daily low, which tells you the floor isn’t falling out.
The canola S&D has loosened. ABARES bumping Australian canola from 6.2 to 7.3 MMT and the WASDE confirming it does relieve some of the supply pressure we’d been tracking. The S&D isn’t going to be as tight as we previously expected — there’s now some wiggle room. But we do flag: the Super El Niño hasn’t hit Australia hard yet, and there are still two months of crop development ahead. Also worth flagging for next year’s Australian winter crop planning. The next major catalyst for canola will be any changes to the Canadian yield or, importantly, any reports on acre loss from the weather across Western Canada.
Harvest progress is now the primary focus — more than conditions. The damage to U.S. corn is already done and confirmed by the WASDE. Beans are looking good on development. What matters now is whether supply hits the market when commercials need it to execute. Canada’s harvest is becoming an increasingly material concern — more weather systems are moving through the prairies into next week, and the gap between actual progress and historical pace is widening. If this starts playing out in the U.S. as well, expect basis and nearby spreads to firm as the market competes for timely delivery.
What to Watch Ahead
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North American harvest progress
This is now the primary market driver. In Canada, harvest is critically behind with more systems inbound. In the U.S., corn harvest just started at 5%. Any delays create basis opportunities and firming pressure as the industry scrambles for supply to meet execution needs. Producers focused on getting crop off the field have leverage.
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Canadian canola — yield changes and potential acre loss
WASDE held Canada at 22.5 MMT. Alberta yield estimates continue trending lower (now 37.0 bu/ac). Any reports of acre loss from the ongoing weather situation would be a new and significant bearish input for Canadian canola supply that the market hasn’t priced.
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Australian weather through harvest
ABARES and WASDE have loosened the canola and wheat world balance sheets with bumped Australian production. The Super El Niño hasn’t been as detrimental as expected so far, but there’s still a month or two of risk ahead before the November set. We flag it but aren’t weighting it heavily yet.
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Bottom line: The WASDE confirmed a tighter corn story and loosened the world wheat and canola balances. Energy is the dominant market with oil over $100 and diesel over $5. The ag complex is digesting all of this alongside a Canadian harvest that’s falling dangerously behind pace. The focus shifts from conditions to execution — can supply reach the market when it’s needed? Protect what works and watch for opportunities as harvest progress drives near-term basis and spread dynamics. 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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