South American corn and soybean production is coming in larger than expected. A year-over-year increase is expected for U.S. soybean production, but corn output will be down from year-ago levels. This world market environment has caused Ontario corn and soybean prices to soften. The Ontario wheat market is adjusting to Northern Hemisphere production forecasts. Food security issues are developing in Iran and the Middle East.
Quick look
- Soybeans: U.S. soybean fundamentals are bearish due to global tensions.
- Corn: Corn prices stalled in April.
- Wheat: Winter wheat reach two-year high on North American market instability.
Soybeans
The Ontario soybean market has been functioning to ration demand by trading at a premium to world values. Export offers from Brazil, Argentina and the U.S. are grinding lower, which has caused Ontario prices to soften while maintaining the premium over the world market. There is no shortage of soybeans in the world, while Chinese demand appears to be limited in the short term. Apparently, China is well covered for May and June.
The Brazilian soybean harvest has wrapped up. The U.S. Department of Agriculture estimated the crop at 180 million tonnes, up from the year-ago output of 172.5 million tonnes. Brazil is expected to export 115 million tonnes this year, up from only 103 million tonnes last year.
In Argentina, the soybean harvest will be moving into the final stages by the end of April. Private trade estimates have the crop in the range of 50 million to 53 million tonnes. This compares to the USDA forecast of 48.0 million tonnes and last year’s output of 51 million tonnes. Argentina exports about eight million tonnes of soybeans each year and is the world’s largest exporter of soybean meal and soybean oil.
In the U.S., we’re expecting the 2026 soybean crop to reach 120.4 million tonnes, up from the 2025 output of 116 million tonnes. Larger exports from Brazil will likely result in a year-over-year decrease in U.S. offshore movement. U.S. soybean offers are at a premium to Brazilian origin. This past year, U.S. soybean exports to China were largely due to political pressure. Recent tensions will limit U.S. soybean exports to China in the 2026-27 crop year. Barring adverse weather during the growing season, U.S. soybean fundamentals are bearish.
Ontario soybean production is expected to come in at four million tonnes, up from the 2025 crop size of 3.6 million tonnes. This larger crop comes on the heels of a historically tight carryout. During the fall period, the Ontario soybean market will function to encourage demand. Export offers will need to be competitive with Brazilian offers at harvest.
We’ve advised Ontario farmers to be 90 per cent sold on their 2025 production.
Corn
Ontario corn prices have been relatively flat over the past month. The market is lacking demand at the higher levels. Earlier in the spring, the economics worked so that U.S. corn would trade into southern Ontario. The USDA has reported sales to Canada, but we’re not sure if these sales are to Alberta or Ontario. We’re expecting Ontario to import approximately 600,000 tonnes of U.S. corn during the 2025/26 crop year. We believe U.S. corn imports have capped additional upside potential for Ontario corn prices.
To reiterate from our previous issue, it appears that Ontario ethanol processors have the bulk of their demand covered until new crop. At the same time, offshore movement for Ontario corn is down sharply from last year. Canadian corn crop year-to-date exports for the week ending April 12 were 463,000 tonnes, down from 1.7 million tonnes last year. Domestic feed users also have sufficient coverage over the next couple of months.
Private analysts are estimating Brazilian corn output to finish in the range of 139 million to 141 million tonnes. This is up from the U.S. forecast of 132 million tonnes and up from last year’s crop of 136 million tonnes. Brazil’s main second corn crop, known as the “Safrinha production,” is in the vegetative or early reproductive stage. The “Safrinha” harvest will move into high gear in June.
In Argentina, traders are expecting the crop to reach 61 million tonnes. This is up from the USDA forecast of 52 million tonnes and up from the 2025 production of 50.0 million tonnes. This additional production will move offshore. The Argentine corn harvest will wrap up by mid-May.
U.S. corn was offered at US$217 per tonne f.o.b. the Gulf, while Brazilian corn was quoted at US$226 per tonne f.o.b. Paranaguá. Later in the summer, Brazilian offers will be at a discount to U.S. corn.
We’re expecting U.S. corn production to reach 409 million tonnes, down from the 2025 output of 432 million tonnes. Keep in mind that U.S. farmers sell 55 per cent of their corn crop in the first three months of the crop year. The world market will have serious competition from Brazil, Argentina and the U.S. during the fall period.
Ontario corn production is expected to finish near 10 million tonnes, up from the 2025 production of 9.5 million tonnes. Ontario farmers also sell over 50 per cent of the crop in the first four months of the crop year. The natural trade flow for Ontario corn is into northern European markets. Nearly 40 per cent of European wheat trades into domestic feed channels, so this sets the tone for imported corn prices.
We’ve advised Ontario farmers to be 90 per cent sold on their 2025 production. The corn market is bearish once the U.S. crop is more certain.
Wheat
Ontario winter wheat prices continue to hover near two-year highs as the market incorporates a risk premium due to uncertainty in Northern Hemisphere production. The Ontario winter wheat crop is developing under favourable conditions. Above-average yields are expected. Ontario winter wheat production is estimated in the range of 2.7 million to 2.9 million tonnes, relatively unchanged from last year’s crop, which was also 2.9 million tonnes. Some regions have received too much rain, but yield drag will be limited.
Analysts have lowered their U.S. hard red winter wheat production estimate. The drought-like conditions have expanded over the past few weeks. We’re now forecasting U.S. hard red winter wheat production to drop to 17.5 million tonnes, down from the 2025 crop size of 21.9 million tonnes. There are no changes to the soft red winter projection. We feel comfortable with a forecast of 8.9 million tonnes, down from the year-ago output of 9.6 million tonnes.
In Russia, the Krasnodar region has some drier pockets. At this time, crop reports describe the wheat as good or satisfactory for the bulk of the winter wheat crop. However, the weather forecast for this region calls for below-normal precipitation for May and June. Farmers need to watch Russian conditions in late spring. A weather rally due to Russian dryness could spark a $0.50–$1.00 rally, which would provide a new-crop selling opportunity. Currently, Russian all-wheat production forecasts are in the range of 83 million to 85 million tonnes, down from 88 million tonnes last year.
There are no concerns with the European wheat crop. French soft wheat offers are the cheapest on the world market. Low European wheat prices have also tempered import demand for Ontario corn. We continue to project a European soft wheat crop of 124 million to 126 million tonnes, down from the bumper 2025 output of 136.1 million tonnes.
We’ve advised farmers to finish sales on their 2025 production. We’re watching for selling opportunities for new-crop positions. Given the U.S. problem in the southern Plains and the Russian weather forecast, farmers can brace for higher wheat prices in the 2026-27 crop year.
Wheat is a staple in the Persian Gulf states. The closure or limited traffic through the Strait of Hormuz has disrupted grain and food shipments. Countries have reserves, but we don’t know exactly how well each country is prepared. Fears could spark a “run on grocery stores” in the Gulf states. There are also concerns for the broader macro market environment.
Certain importing countries outside the Gulf are also starting to prepare and increase reserves. The population goes mad after 48 hours of empty food shelves. That’s all it takes. This comes on the heels of contentious food inflation over the past five years. We’ve mentioned in the previous article that the world is no longer comfortable with past stock levels of wheat.
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