US and the World

The changeover in the calendar year always represents a shifting of the gears in our grain marketing outlook. At least in North America it seems that way with winter settling in with most of the crops in the bin. At the same time in South America, it is the middle of their summer. This means that all of the marketing factors with regard to crop weather are weighing into the price discovery equation. Needless to say, the mechanics of markets go on whether you change gears or not. It has been an incredibly good growing season this past year in North America. On December the 9th the USDA weighed in with their latest WASDE report.

The December USDA report is usually a non-starter wedged between harvest in the United States and the January report which is usually much bigger from a market standpoint. This December report reflected not only that but also the slow regeneration of numbers coming out of the US government shutdown. The biggest change from the December report was reflected in the corn export number which was increased 125 million bushels from last month up to 3.2 billion bushels which is record territory. This brought down the corn ending stocks for 2025/2026 to 2.029 billion bushels down that 125 million bushels from last month. Everything else remained the same including the 16.752 billion bushels of corn production from this year.

The soybean numbers remained the same from last month with US production at 4.253 billion bushels with a yield of 53 bushels per acre. Soybean exports at 1.635 billion bushels was unchanged from November. Brazilian production remained at 175 MMTs and in Argentina at 48.5 MMTs. The wheat numbers were also the same except for world ending stocks were actually increased this month to 274.87 MMTs, up from 271.43 MMTs in November.

On Dec 12th corn and wheat futures were higher than the last Market Trends report. Soybeans were lower. March 2026 corn futures was at $4.40 a bushel. Dec 2026 corn was at $4.62 bu. The January 2026 soybean futures was at $10.76 bu. The November 2026 soybean futures were at $10.88. The March 2026 wheat futures closed at $5.29 a bushel. The Minneapolis March 2026 wheat futures closed at $5.75 a bushel with the September 2026 contract closing at $6.12 a bushel.

The nearby oil futures as of December 12th closed at $57.44/barrel lower vs the nearby futures recorded in the last Market Trends report of $60.09/barrel. The average price for US ethanol in the US was $2.04/gallon, down vs the $2.12/gallon recorded in the last Market Trends Report.

The Canadian dollar noon rate on December 12th, 2025, was .7263 US, up vs the .7130 US reported here in the last Market Trends report. The Bank of Canada’s lending rate was reduced to 2.25%.

Ontario

Corn harvest is continuing in Ontario. As of December 13th, there is still a significant amount of Ontario corn still left in the field. Let’s estimate that at about 20 to 25%. We got here because of heavy snow that came early in December and looks to be staying as the month wore on. Much of this snow and cold temperatures is preventing any significant harvest progress in areas where it is apparent. Some of this Ontario corn we’ll be waiting till spring to be harvested.

Production estimates vary but it looks like we’re looking at winter wheat acreage this past fall in a range between 1.046 million acres and 1.18 million acres. This is significant especially when you consider the low prices of wheat. It would seem that Ontario producers always need a good fall weather forecast to get wheat planted and 2025 was good. For many of those wheat acres they’re under a blanket of snow now even in the deep south west of the province.

Ontario basis levels for corn has hardly moved from the last Market Trends report. The Canadian dollar has been fluttering within the $0.71 range during this time currently at.7263 US. There also is the spectre of crop still in the field in some parts of Ontario as well as uneven supply in others. Corn yields in Ontario overall are likely down from last year even with the huge yields in the deep south west of Ontario. The soybean basis has increased slightly from last month partly reflecting the moves in the Canadian dollar.

Old crop corn basis levels are $1.35 to $2.12 over the March 2026 corn futures on Dec 12th across the province. New crop corn basis levels were $1.15 to $1.45 over Dec 2026 futures. The old crop basis levels for soybeans range from $3.18 to $3.50 over the January 2026 futures. New crop soybeans range from $2.87 to $3.13 over the November 2026 futures. Ontario SRW wheat prices are approximately $6.49. For July 2026 new crop the bid is in the $6.56 bu. range. On December 12th the US replacement price for corn was $6.49/bushel. You can access all these Ontario grain prices in the marketing section at https://gfo.ca/marketing/daily-commodity-report/

The Bottom Line

The December 9th USDA report can only be considered neutral for price action as of early December. At the same time that this was happening we did see the price of soybeans start dropping rather significantly into the report and it is continued into mid-December. Part of this is the realization that China is not going to come to the rescue as well as good South American weather and a record South American crop on its way once again.

Earlier the Chinese had agreed to buy 12 MMTs of soybeans from the United States. This came out of the presidential meetings between President Trump and President Xi. This is happening with small purchases of US soybeans amounting to about half of that as of now. That commitment should be fulfilled by the end of February even when South American soybeans are cheaper. In reality, there’s really no reason for China to buy anymore American soybeans especially in the political climate we have today. That is, of course as long as the South American crop does not get in trouble.

The US government shutdown was significant for market action in November going into December. For the week ending November 22nd fund buying was off the chart for both corn and soybeans and much of this had to do with the vacuum of USDA information. In fact, USDA number since then have not supported this fund buying and this is partly why we’ve seen the funds exciting their longs over the last week from December the 12th. Clearly, these things can happen when USDA information is dialed into algorithms. As we move ahead, we might expect these algorithms to retrench based on more bearish USDA information.

Of course, there are all kinds of issues that affect market price but at the end of the day a weather market is the thing that it usually comes down to. At the present time soybean futures do represent many things but they also represent the good crop weather in South America. As we all know USDA’s predicted record crops for Brazil this year and it’s happening as we speak. Lately South American weather has been bulletproofed, we will see if that continues.

Commodity Specific Comments

Corn

Corn has been somewhat of a star among the agricultural commodities all year. That’s because we had the biggest record crop in the field by a country mile and futures prices did not fall apart, in fact they are higher than last year. USDA even increased corn demand by 125 million bushels in their last report.

However, the January report could be confession time for corn. Is the crop really that big? Will the USDA continue to change the number of planted acres and harvested acres which will be reflected in production? It’s also hard to say at this point but as we look into the January 12th, 2026, report, those marketing variables have to be kept in mind.

The March 2026 corn contract is currently priced at 8.25 cents lower than the March 2026 contract a neutral indication of old crop corn demand. This spread has been cut in half from last month. Seasonally, we know that corn prices tend to peak in early June and bottom out in early October. The March 2026 corn futures contract is at the 13th percentile of the past five-year price distribution range.

Soybeans

Soybeans have lost about a dollar a bushel since mid-October. There was a mysterious pent-up demand for Chinese buying which of course never really happened in any big way. The funds have also exited soybeans over the last few weeks, and we know there’s a big Brazilian crop down south.

There is some thought that the USDA will reduce the soybean national yield in the January report. In fact, some of this conjecture has been up to two bushels per acre which could carve off about 160 million bushels over the ending stocks figure. This would put soybean ending stocks at a very low level setting up the spectre for some fireworks ahead. The bulls can only hope.

The January 2026 soybean contract is currently priced 10 cents below the March contract considered neutral for soybean demand. Seasonally, soybean prices tend to peak in early July and bottom out in early October. The January 2026 soybean contract is currently at the 16th percentile of the past five-year price distribution range.

Wheat

The December WASDE report did document an increase in world wheat production as well as an increase in world wheat stocks. In addition to this, last week the Rosario exchange forecasted that the Argentinian wheat crop was increased by another 3 MMTS. It is an old...