AAFC cautioned that the conflict in Iran “has heightened geopolitical tensions and market volatility,” and noted that planting decisions could be altered while “the report is based on information and trade policies in effect as of March 11, 2026.”

Canola

• Projected canola ending stocks for 2025-26 were left unchanged at 2.76 million tonnes, while the 2026-27 forecast was cut by 200,000 tonnes from February at 1.46 million tonnes.

• Given average yields, AAFC forecast Canadian canola production in 2026-27 at 19.20 million tonnes, which was unchanged from the February estimate and down from the 21.80 million tonnes grown in 2025-26.

Wheat

• New crop wheat ending stocks were raised to 5.75 million tonnes from 5.70 million in February, while the 2025-26 wheat carryout held at 7.35 million tonnes.

• AAFC raised its call on wheat production to 35.01 million tonnes, from 34.98 million the previous month. That would still be well below the 39.96 million tonnes harvested in 2025-26.

Pulses

• Other notable revisions included slight increases in pea and lentil production estimates, with ending stocks of the two pulses also up by 100,000 tonnes each from the previous forecast.

• The pea carryout for 2026-27 was raised to 945,000 tonnes from 845,000 tonnes in February, while lentils were forecast at 1.67 million from 1.57 million tonnes.

• Pea ending stocks for the current marketing year are estimated at 1.31 million tonnes with lentils at 1.695 million tonnes.

Soybeans/Corn

• Corn ending stocks for both 2025-26 and 2026-27 were left at 2.00 million tonnes.

• Soybean carryout for 2026-27 was cut by 50,000 tonnes from February, at 693,000 tonnes, which compares with 443,000 for the current marketing year.

March estimates for Canadian major crops supply and demand: in million tonnes. Source: Agriculture and Agri-Food Canada.

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Noting that “geopolitical risks and trade uncertainties have heightened volatility in both Canadian and international grain markets,” AAFC said its forecasts were based off the current trade policies and could easily be altered in subsequent reports.

China imposed 100 per cent tariffs on Canadian canola oil, meal, and peas beginning March 20, while the U.S. has set April 2 as its next tariff date.

AAFC raised its call for 2025/26 canola ending stocks to 2.000 million tonnes, which compares with the February estimate of 1.000 million tonnes and the 2024/25 projection of 1.300 million tonnes.

While anticipated canola exports were revised slightly higher from the February forecast, they would still be down by 1.500 million tonnes on the year at 6.000 million. Meanwhile, projected domestic canola usage for 2025/26 was forecast at 11.400 million tonnes — down by a million tonnes from the February forecast.

“The reduced (domestic usage) forecast is tentative and may decline further if proposed tariffs and trade disturbances materialize,” said AAFC adding “the crush forecast may revert to last month’s estimates if policies stabilize, and plants operate at full capacity.

Meanwhile, AAFC expects Canadian pea exports will fall sharply from the current crop year with the expectation that current Chinese import tariffs continue and the non-import dry pea tariff exemption from India expires on May 31, 2025. Carry-out pea stocks are expected to rise to the record level of 1.775 million tonnes, from 700,000 for 2024/25.

March estimates for Canadian major crops supply and demand: in million tonnes. Source: Agriculture and Agri-Food Canada.

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The U.S. Federal Reserve announced earlier Wednesday that the central bank’s policy rate will remain within 5.25 and 5.5 per cent, but future rate hikes are still a possibility.

“It’s been pretty much anticipated by the trade. So it was pretty much factored in,” Jack Scoville of The Price Futures Group in Chicago said. “It certainly hasn’t been a reason to buy the market, but there’s no reason to sell the market down either.”

However, demand for U.S. grains was at the top of mind for traders. Wheat was a particular focus as exports reported by the U.S. Department of Agriculture on Oct. 26 totaled 7.114 million tonnes, compared to the 9.65 million shipped that time last year.

Over the past few months, U.S. wheat has struggled on the world market compared to less expensive Russian wheat.

“(The lack of exports is) being caused primarily by exports coming out of the Black Sea. Mostly from Russia, but Ukraine says they are still exporting through the Black Sea, as well,” Scoville said. “I think we’re going down looking for demand to show up, but we haven’t found it yet.”

He believes that export demand for U.S. wheat will pick up if Chicago wheat prices move down to US$5.50 per bushel.

Scoville added that the trade isn’t paying much attention to corn and soybeans, with the latter moving up in price at the expiry of their November contract, while being in the middle of their respective harvests. He also expects weather conditions in South America will moderate after the presence of dry conditions in northern areas and wetness in southern areas.

The U.S. Department of Agriculture will release its November world agricultural supply/demand estimates (WASDE) on Nov. 9. While he was unaware of the trade’s predictions yet, Scoville thinks demand for U.S. grains will come down.

“They might trim demand back for pretty much all (grains),” he said.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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“Particularly, in the last few weeks, there have been a number of supply events which have really added up and tightened the market significantly,” said Chris Lawson, the New York-based head of fertilizers for CRU Group.

Increased demand by producers, combined with higher prices for urea, phosphates and potash, had already caused the price of fertilizer to rise. Then, Hurricane Ida shuttered nitrogen plants along the U.S. Gulf Coast and a rally in European natural gas prices earlier this month forced Yara International and CF Industries to curtail and even shut down production at their nitrogen plants across the Atlantic.

Sanctions on major potash exporter Belarus, production cuts and export limits in China, and supply chain disruptions are also not helping matters.

“It’s a perfect storm of supply events right now. We’re in a pretty crazy market,” Lawson added. “I’d say nitrogen fertilizer (prices have) moved the highest because of the issues in Louisiana and the issues in Europe. Those are where you make fertilizer with urea and UAN (urea ammonium nitrate), a liquid form of nitrogen which is quite popular in Canada.”

Chuck Fossay, director of grains, oilseeds and pulses for Keystone Agricultural Producers (KAP) of Manitoba, said producers are feeling the impact of reduced supply and higher costs.

“Everybody’s watching the prices to see if they’re going to continue going up, plateau, or start working their way down if some of the supply issues work themselves out,” he said, adding that fertilizer prices have gone up 60 per cent compared to last year, with urea now costing up to 75 cents/lb.

“Right now, most of us are in a ‘wait-and-see’ position,” Fossay said.

Fossay advises KAP members to conduct soil tests on their fields as well as a cost analysis to determine which type of fertilizer to use. He said fertilizer costs may reach their low point during the holiday season, but Fossay admits waiting until then to buy may be a gamble.

Lawson added that fertilizer is just one of many aspects of crop production seeing higher costs, but higher prices for crops may soften the blow.

“All inputs (into crop production) have gone up through the course of the last year or so. It’s not just fertilizer. It’s things like glyphosates, as well, and the cost of machinery is moving higher if a farmer can get his hands on it. The farm budget is certainly being pushed up,” he said.

“The longer these prices continue to move higher, the profit margins are going to be squeezed more and more…(But) we should see continued high prices for commodities over the next 12 months.”

Lawson predicts fertilizer prices may come down by December only to return back up next spring, but 2022 could provide much-needed relief for producers.

“We do anticipate a fairly steep drop-off in prices during the second half of 2022. We do think that the market and supply issues will be ironed out (by then),” he said.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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BHP announced Tuesday it is going ahead with its Jansen potash project, which is expected to cost $7.2 billion in the first phase.

The mine will produce 4.35 million tonnes of potash per year from 2027, BHP said. Potash is a key element in plant nutrition that also makes crops more drought resistant.

Canada produced 21 million tonnes in 2019, accounting for more than 31 per cent of global supply.

“It will take another decade for Jansen to have significant production,” Ken Seitz, chief executive of Nutrien Potash said in a statement.

Nutrien expects global demand to grow by two to three per cent per year until close to 2030. The company is also seen as an ideal partner to dilute BHP’s risk and development costs. BHP says it is open to but not in need of a partner, while Nutrien has said that any tie-up with BHP is not its focus.

Global potash demand by 2030 is likely to be more than sufficient to absorb additional supply from Jansen, said Morningstar analyst Seth Goldstein, as farmers in Asia use more of the crop nutrient.

“Potash has one of the best demand outlooks of any fertilizer out there,” Goldstein said.

This month Washington imposed sanctions on Belaruskali OAO, one of Belarus’ largest state-owned enterprises and among the world’s biggest producers of potash. Belarus Potash Co. (BPC), the exporting arm of Belaruskali, warned the move would lead to global potash price increases.

Jansen is expected to create 3,500 jobs annually during construction and employ 600 permanent operating staff.

Saskatchewan Premier Scott Moe on Tuesday described the Jansen mine as the largest private economic investment in the province’s history.

— Nia Williams is a Reuters reporter in Calgary.

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With bids already elevated due to a downturn in potential new-crop supply, the price of durum could rise even higher.

“There’s not a lot of trade going on — cash trade, that is,” MarketsFarm expert Bruce Burnett said. “Farmers really aren’t selling any durum past what they’ve already committed. Buyers still aren’t really posting bids it would take to make those trades. It’s a bit of a détente.”

Durum production in Canada is expected to total 5.835 million tonnes for the 2021-22 crop year, according to Agriculture and Agri-Food Canada’s (AAFC) latest monthly crop estimates released Tuesday.

AAFC downgraded its estimate for durum by 2.9 per cent from the 6.01 million tonnes it predicted in June. In total, 6.571 million tonnes were produced during the 2020-21 crop year — meaning if estimates hold, durum is set for an 11.2 per cent year-over-year decline.

The high-delivered bid for durum in Alberta was $9.78 per bushel, 99 cents higher than last month, according to Prairie Ag Hotwire data from Tuesday. In Saskatchewan, the price was $10.96/bu., up $2.12 on the month.

Burnett added there will be additional demand for North American durum from the Mediterranean, but Morocco’s durum harvest is sufficient not to warrant additional imports.

Jerry Klassen, a Winnipeg-based independent trader, added that France’s harvest is lagging last year’s due to heavy rains and much of the demand for Canadian durum will come from the U.S. and France.

“There was no wiggle room for a crop problem and now we do have a crop problem,” he said. “So we’re going to have historically tight stocks for two years in a row. Next spring, the market will need to encourage acreage.”

Klassen believes that the worst of the heat is over and good durum crop conditions in Saskatchewan will cause a standstill in prices. However, Burnett thinks traders will play the long game before prices are settled.

“I think everybody’s just waiting to see what the quality and quantity of this year’s durum harvest is before we see the price situation get clarified dramatically,” he said.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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“It’s a kind of an interesting scenario, where you see farmers not selling and prices to farmers keep going up and up. The trade cannot cover their positions selling at lower prices. Destination markets are not in desperation mode to buy products,” Mosnaim said, noting the latter is only buying “hand to mouth, with no rush to buy more.”

He couldn’t place a finger on one particular reason, but believes it’s a combination of factors, including the global COVID-19 pandemic.

He suggested the pandemic has resulted in people in less fortunate countries having only enough money to buy the cheapest food they can find — and that transportation costs have risen to the point where customers have turned to buying local.

“It looks like a lot of markets bought a lot of products last year. The sales have not been as strong as they were expecting,” Mosnaim said.

“Why would you fill your warehouse with $1,000 lentils when a year ago you were paying $700 or $800?”

The true picture of what has been happening this year will come out eventually, he said. “In our industry, the beauty is every year is different, and we only know the reason why when it’s too late.”

— Glen Hallick reports for MarketsFarm from Winnipeg.

Table: Current lentil price ranges, in Canadian cents per pound. Source: Prairie Ag Hotwire.

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Statistics Canada releases its first survey-based acreage estimates for the upcoming growing season on Tuesday next week (April 27), which should lead to adjustments in subsequent supply/demand projections.

Canola ending stocks for both the current marketing year and the upcoming 2021-22 crop year were left unchanged at 700,000 tonnes for both years. That would be well below the 3.13 million tonne carryout from 2019-20.

Wheat, durum, barley, and corn saw slight downward revisions to their new-crop ending stocks projections. Total wheat carryout for 2020-21 was unchanged at 5.31 million tonnes, while new-crop wheat ending stocks were lowered to 6.05 million from 6.22 million in March.

The barley carryout for 2020-21 was lowered by 100,000 tonnes, to 500,000 tonnes, while new-crop barley carryout was down by the same amount to an estimated at 700,000 tonnes.

Pulse and special crops only saw minor adjustments on the month.

Tables: April estimates for Canadian major crops’ supply and demand, in millions of metric tonnes. Source: Agriculture and Agri-Food Canada.

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“The demand for protein is strong,” said Altin Kalo, economist at Steiner Consulting Group. It’s people getting ready for the spring and restaurants opening up and trying to refill the pipeline.”

CME June live cattle settled 0.2 cent higher at 124.625 cents/lb. after setting a contract high of 125.125 cents (all figures US$). May feeder cattle futures were unchanged at 151.775 cents.

Choice cuts of boxed beef added $4.10, to $262.77/cwt, while select cuts gained $1.44, to $251.30/cwt, according to the U.S. Department of Agriculture.

U.S. daily cattle slaughter resumed an increased pace after slower processing Friday and Monday due to the Easter holiday, with 120,000 head slaughtered Tuesday, compared to 105,000 the day prior.

Meanwhile, Chicago Mercantile Exchange lean hogs inched higher, supported by strong cash prices and consumer demand.

CME June lean hogs settled 0.025 cent higher at 105.625 cents/lb.

The CME’s lean hog index, a two-day weighted average of cash prices, climbed to $100.10/cwt, its highest since October 2014, though Kalo noted the rise in cash hogs has slowed.

“The cash market seems like it’s settled down — for a little while it seemed like it just kept going higher every single day,” he said.

The number of hogs slaughtered also regained, with 492,000 hogs processed Tuesday, versus 325,000 on Monday, according to USDA.

— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.

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“Cattle futures continue to price in better days ahead and the technical picture looks improved as well,” brokerage StoneX said in a statement.

The most-active June live cattle contract rose for the sixth time in seven sessions. The contract has risen 4.1 per cent during that stretch.

Hog futures eased, with traders noting profit-taking following the market’s run-up to its highest since May 2019 last week.

CME April live cattle settled up 0.125 cent at 119.125 cents/lb. (all figures US$).

The June contract gained 1.35 cents, to 121.775, closing below its session peak after failing to hold support above the high end of its 20-day Bollinger range. The June live cattle contract hit its highest since Feb. 12.

April feeder cattle futures settled up 0.7 cent at 143.925 cents/lb., after reaching 144.6, the contract’s highest since Feb. 26.

CME April lean hog futures settled down 0.85 cent at 90.55 cents/lb. June hogs dipped 0.075 cent to close at 98.925 cents.

The U.S. Department of Agriculture reported the pork carcass cutout value on Monday afternoon at a 9-1/2-month high of $102.44, up $4.14 from Friday afternoon.

— Mark Weinraub is a Reuters commodities correspondent in Chicago.

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