Market Trends Report – July & August 2026

US and the World

It is a critical time of the year in grain markets. In many years mid to late July is a time where the market has already decided where this crop is going. 2026 might be a different year. Widespread hot and droughty weather in Western Europe as well as the threat of the same in North America is sending nervousness throughout the grain complex. On top of this we have all the same geopolitical problems in Ukraine and Russia as well as Iran adding to the uncertainty. This is the backdrop as we head into August. On July 10th the USDA released their latest WASDE report.

The July USDA WASDE report estimated corn production to come in at 16 billion bushels up from 15.995 billion bushels in June. This was based on a yield which remained at 183 bushels per acre with planted acreage at 95.3 million acres. This remains the second largest corn crop on record if it comes to fruition. New crop ending stocks were lowered 125 million bushels down to 2.02 billion bushels. Corn usage in the United States was increased 50 million bushels from June putting it at 16.255 billion bushels.

USDA is predicting the largest soybean crop In U.S. history. The estimate is 4.475 billion bushels with the trendline yield estimate of 53 bushels per acre planted on 85.4 million acres. US new crop ending stocks are set to come in at 310 million bushels with old crop stocks coming in at 330 million bushels. USDA left Brazil’s production unchanged at 180 MMT and Argentina at 50 MMT. Total US wheat production is set at 1.536 billion bushels which is down slightly from last month and the smallest wheat crop on record.

On July 24th corn, soybeans and wheat were higher than the last Market Trends report. September 2026 corn futures were at $4.64 a bushel. Dec 2026 corn was at $4.87 bu. The November 2026 soybean futures was at $12.53 bu. The Sept 2026 wheat futures closed at $6.78 a bushel. The Minneapolis Sept 2026 wheat futures closed at $7.14 a bushel with the September 2027 contract closing at $7.46 a bushel.

The nearby oil futures as of July 24th, 2026, closed at $89.31/barrel much higher vs the nearby futures recorded in the last Market Trends report of $68.78/barrel. The average price for US ethanol in the US was $2.19/gallon, higher vs the $2.17/gallon recorded in the last Market Trends Report.

The Canadian dollar noon rate on July 24th, 2026, was .7096 US, marginally higher vs the .7042 US reported here in the last Market Trends report. The Bank of Canada’s lending rate remained at 2.25%.

Ontario

In Ontario generally speaking crops are doing excellent. However, as always there are regional variations with extreme drought in some areas of the deep southwest and south-central Ontario. Eastern Ontario has had much better moisture conditions than they did a year ago. As of the 24th of July, rainfall is needed in many areas of the southwest as corn is roping up and soybeans in some cases are wilting. However, there is still a long way of the growing season to go, and rains would cure much of this. As it is, with normal rainfall Ontario should be looking at good crops this fall.

Wheat harvest continues across the province with good to excellent yields and quite good quality. Very dry conditions in the deepest part of southwestern Ontario made for a good harvest. However, other areas were not as lucky, and it was more challenging to get wheat dried down in the field. However, it continues in eastern and north central Ontario. So far there are very few quality issues.

Basis levels for grains have stayed relatively steady since the last Market Trends report. This is partly due to the relative parity in the value of the Canadian dollar versus what it was three weeks ago at .7042 US. As always, a low Canadian dollar is the stimulus for the Ontario grain cash market. Corn basis levels have been a little stronger and as we go into August that may continue.

Old crop corn basis levels are $1.65 to $2.38 over the September 2026 corn futures on July 24th across the province. New crop corn basis levels were $1.65 to $1.94 over Dec 2026 futures. The old crop basis levels for soybeans range from $4.34 to $4.70 over the November 2026 futures. New crop soybeans range from $3.89 to $4.15 over the November 2026 futures. Ontario SRW wheat prices are in flux during harvest by as of July 24th are approximately $8.25. For July 2027 new crop the bid is in the $8.91/bu. range. On July 24th the US replacement price for corn was $7.16/bushel. You can access all these Ontario grain prices in the marketing section at https://gfo.ca/daily-commodity-report/

The Bottom Line

Things are all coming together to move markets higher. We have a confluence of issues that are unusual to come together at one time. What we have is the hot and dry heat dome and drought into Western Europe with the possibility of that also manifesting itself in North America. At the same time, we have the Iran US war which is pressuring the oil market which in turn is dragging grains up with it. All of this happening at the same time is unusual for this time of year.

Keep in mind where we are seasonally with grain markets. The last week in July is usually one when grain markets put in a top and drop into the fall time. That happens about 85% of the time but this year might be different. We might be into a contra seasonal where the crop is getting smaller, as do ending stocks and the price usually goes higher into the fall. The timing this year seems critical.

So, what does this mean? You can make the argument that we have time here to decide which type of market we are in and if you believe prices are going up because forces are coming together to do that, market your grain appropriately and hedge both the downside and upside. That means different things to different farmers and that’s OK, just recognize this current grain environment is incredibly volatile based on the grain fundamentals and our geopolitical concerns.

As always, this time of year, weather is such a big concern. Keep in mind, the super El Nino is still out there and affecting crop development worldwide. In a El Nino year Brazil is supposed to be dry. Between Brazil and Argentina, they produced twice as many soybeans as the United States and if El Nino manifests itself in a big way, there could be some real price fireworks.

Commodity Specific Comments

Corn

The drought in Europe has had an effect on the corn market. The Europeans produce about 2.3 billion bushels of corn and import about 800 million every year. This means that they will probably be importing more corn this year which has obvious implications for Ontario corn exports.

Keep in mind that these drought concerns whether they be in Europe or the United States are pushing up the price of corn, but it also is reacting to the price of oil. The ongoing tension in Iran and the Strait of Hormuz will continue to have an effect on the price of corn.

The September 2026 corn contract is currently priced at 22.5 cents lower than the December 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 2026 corn futures contract is at the 19th percentile of the past five-year price distribution range.

Soybeans

Soybeans are at contract highs as of July 24th. Of course, this is good news with anybody marketing soybeans but keep in mind these contracts can run very fast with high daily limits. Post those standing market orders optimistically, as they could be hit very quickly.

Soybean prices have also been supported by Chinese buying. Yes, they have finally come into the market, and it has been timely for price as US beans are very competitive against South American soybeans. There is a September meeting between President Trump and President Xi, and this may result in even more buying.

The August 2026 soybean contract is currently priced 7.75 cents above the September contract considered bullish for old crop soybean demand. Seasonally, soybean prices tend to peak in early July and bottom out in early October. The November 2026 soybean contract is currently at the 37th percentile of the past five-year price distribution range.

Wheat

The spectre of drought and heat in Europe has had an effect on the wheat market. Keep in mind that all countries in Europe makes it the largest wheat exporter in the world. Combine this with the problems of compromised grain movement in the sea of Azov amid the ongoing war and you have lots of uncertainty. Combine this with the ongoing super El Nino and there could be production problems in other places such as Australia.

In Ontario the wheat crop has been relatively good news with good yields and quality. Quality is always a problem with wheat but for whatever reason this year including the good management of Ontario wheat producers that is not much of a concern. What has been good has been a cash price rally in wheat at harvest time which has pushed prices up over $2.00 a bushel higher than a year ago.

The Bottom Line (cont.)

The Canadian dollar continues to flutter around the $0.71 level US which is helping Ontario grain prices. It is always a constant with regard to cash prices and can act as a buffer but in a grain environment where futures are rising significantly it can also act as a supercharger to cash prices. This is the environment that we are in now. If grain futures prices get spooked by heat domes and geopolitical concerns further, it will have an accelerating effect on Ontario cash grain values.

The Canadian dollar is a thinly traded currency, but it has recently been affected by the aggressive nature of the American administration. President Trump has announced 50% tariffs on an assortment of Canadian goods going into the United States starting possibly on August the 19th. Canadians were gobsmacked by this move and so was the government. Serious trade negotiations are about to commence. Regardless of why it happened this is the type of geopolitical concern that really affects the value of the Canadian dollar. Farmers need to be concerned and watchful over the next several weeks to see where the Canadian dollar goes.

With all of this going on it is important to not be crossways with the trend, and the trend is up for prices. However, in this environment volatility is usually running wild. That yet may happen especially depending on a heat dome moving in as well as geopolitical concerns in Iran and Ukraine and Russia. This is all happening without a Black Swan event, but yet again a Black Swan can always happen and with that, we always have to be ready.

Keep in mind that August is always the month that determines soybean yield historically. Also keep in mind, that soybeans are the great liars but at the end of the day always tell the truth. So, they will need rain, just like we need in stretches across southern Ontario. The challenge for Ontario farmers is to hone their marketing plans in this growing bullish grain environment. Have those standing market orders ready and if they hit, set some more even more optimistically. At the same time risk management never grows old. Hedging our risks is always a good thing. At the end of the day, there will be many marketing opportunities. Daily market intelligence will remain key.