US and the World

It has been a big production year with good planting weather turning into a good summer and record yields predicted. However, as summer turned late the tap turned off and it was very dry across much of the greater American corn belt. As we headed into the end of September many market observers were wondering just how much impact the dry late summer had on the crops growing in the field. On September 12^th the USDA weighed in with their latest WASDE report.

At first glance the September 12th USDA report was bearish showing some very big numbers. In an unexpected move the USDA increased corn production 72 million bushels pushing the projected record total up to 16.814 billion bushels. This happened despite a 2.1 bushel per acre cut in 2025 yield down to 186.7 bushels per acre. The lower yield was offset from USDA by increasing planted acreage and expected harvested acreage. So, we are smashing the previous production record that took place in 2023/2024 of 15.34 billion bushels of corn. The US planted corn acreage was increased 1.4 million acres to 98.7 million acres and harvested acreage is now projected to be 90 million acres up 1.3 million acres from last month. Corn ending stocks for 2025/2026 for the US corn crop is now 2.117 billion bushels which is the highest ending stock in 7 years. Keep in mind anticipated corn demand is at a record high of 16.06 billion bushels.

On the soybean side the USDA was not as dramatic as they were with the corn. US domestic yield was actually cut 1/10 of a bushel down to 53.5 bushels per acre with planted acreage at 81.1 million acres and harvested acreage to be 80.3 million acres. This puts the total soybean production to come in at 4.301 billion bushels. The increase in soybean acreage resulted in a slight increase from the 4.29 billion bushels of soybeans being predicted last month. Production in Brazil and Argentina was left unchanged at 175 MMTs and 48.5 MMTs respectively. China’s import of soybeans is expected to be 112 MMTs, the same as last month. The USDA will update their wheat production forecast in its Small Grains Summary to be released September 30^th.

On September 12th corn, soybean and wheat futures were higher than the last Market Trends report. December 2025 corn futures was at $4.30 a bushel. Dec 2026 corn was at $4.69 bu. The November 2025 soybean futures was at $10.46 bu. The September 2025 wheat futures closed at $5.23 a bushel. The Minneapolis September 2025 wheat futures closed at $5.71 a bushel with the September 2026 contract closing at $6.29 a bushel.

The nearby oil futures as of September 12th closed at $62.69/barrel the same vs the nearby futures recorded in the last Market Trends report of $62.69/barrel. The average price for US ethanol in the US was $2.20/gallon, up vs the $2.05/gallon recorded in the last Market Trends Report.

The Canadian dollar noon rate on September 12th, 2025, was .7221 US, lower vs the .7243 US reported here in the last Market Trends report. The Bank of Canada‘s lending rate remained at 2.75%.

Ontario

In Ontario the yield robber this year will likely be the protracted dry weather that many areas of the province received during the 2025 growing season. Simply put, it was a dry year for eastern and central Ontario as well as the Niagara region and parts of west central Ontario. The one exception is the deep southwest of Ontario which received adequate rainfall and has tremendous crops in the field. However, an argument could still be made that it is still dry and some of these drought induced fields have already seen soybean harvest started.

Corn harvest started earlier for some people in central and eastern Ontario who had no alternative but to harvest corn for silage hoping to salvage something from the drought. At the same time rapid movement of corn out of the province led to a situation where basis levels were much higher especially in eastern Ontario going into Quebec. In other words, large expanses of central and eastern Ontario are the complete opposite of the big crop in the greater American corn belt. As we look ahead US corn will likely move into these areas in 2025/2026 rapidly replacing corn that didn’t come to fruition through drought ravaged fields in 2025. In fact, any early harvest corn coming off this September can find a big premium vs going into later October and November. It’s a unique situation.

Basis levels have risen or widened since the last Market Trends report. This is partly a reflection of the low Canadian dollar currently at .7221 US but also a reflection of the amount of corn that has left the province. This also represents good opportunity for farmers selling as we look ahead. If there’s been one silver lining to the swoon in futures prices over the last year, it’s about our Ontario basis levels. The Canadian dollar has largely been a stimulus to these price levels. The uneven forecast for Ontario corn supply going into 2026 will surely create some basis opportunities looking ahead in eastern Ontario.

Old crop corn basis levels are $1.90 to $2.36 over the December 2025 corn futures on September 12th across the province. New crop corn basis levels were $1.25 to $1.96 over Dec 2025 futures. The old crop basis levels for soybeans range from $2.95 to $3.19 over the November 2025 futures. New crop soybeans range from $2.85 to $3.19 over the November 2025 futures. Ontario SRW wheat prices are approximately $6.04. For July 2026 new crop the bid is in the $6.64 bu. range. On September 12th the US replacement price for corn was $6.92/bushel. You can access all these Ontario grain prices in the marketing section at https://gfo.ca/marketing/daily-commodity-report/

The Bottom Line

There is a huge crop coming in at record levels. It is almost hard to get your mind around it. The USDA has certainly been somewhat uneven over the summer of 2025 with regard to the number of acres that are in the ground. However, with combines rolling across the American corn belt the corn and soybeans are starting to come in and in the next few weeks we should have an even better appreciation for where this crop is.

The overall question might be why did the market react positively to the biggest corn crops ever to be planted in the United States? Of course, if we knew that for sure we could hedge appropriately but keep in mind we’ve had so much negative and bearish news over the period of the summer. Some traders have often said don’t short a sleeping market and that’s what the corn market might have been over the last 60 days. The record demand which can often get overlooked in a big supply scenario is having an impact.

Futures spreads in corn have been weakening over the last month reflecting the notion that the crop might not be as good as first advertised. Initial yield reports out of Illinois are substantiating that. However, on the soybean side the November January futures spreads were unchanged on report day. The commercial side was actually growing more bearish with regard to buying soybeans going into the weekend. So, basis levels in the United States for both corn and soybeans may widen on this run up in futures.

The demand picture for corn is strong. It is the same for soybeans, but American soybeans not so much because of a lack of Chinese purchasing. Keep in mind the price of beef and pork as we go into the grain harvesting season. The price of beef has been at record highs and the price of pork has been high as well. It’s quite obvious that this is good for feed demand, and it will likely be sustained through the winter. The beef and pork price complex is healthy for a variety of reasons. A surging stock market does help consumers in the United States keep up their purchasing of protein.

Commodity Specific Comments

Corn

98.7 million acres of corn is huge. Since the June 30th acreage report we have gained 3.5 million acres of corn which is like piling on. This is the highest acreage since 1936 and it screamed bearishness for the market. However, as we all know the market went up on the news seemingly having digested all the bearishness before the report. It was a strange move.

Having said that, 16.817 billion bushels of corn is a record by a mile versus the 15.34 billion bushels grown two years ago. You would think at a certain point corn will be hitting some headwinds. However, we also have record corn demand currently sitting at 16.06 billion bushels. That is just as mind boggling or even more so than the production number. it makes the price picture looking ahead that much more mysterious.

The December 2025 corn contract is currently priced at 17 cents lower than the March 2026 contract a bearish indication of old crop corn demand. Seasonally, we know that corn prices tend to peak in early June and bottom out in early October. The December 2025 corn futures contract is at the 15th percentile of the past five-year price distribution range.

Soybeans