Low Ontario on-farm stocks could shape spring and summer markets
Quick look:
Corn: Tight stocks should mean good Ontario demand over the summer.
Soybeans: Export and domestic demand running the same as 2024-25, despite lower stocks.
Wheat: About 40 per cent of U.S. winter wheat is under drought conditions.
Ontario on-farm corn, soybeans and wheat stocks will drop to historically low levels at the end of the 2025-26 crop year. There is no cushion in Ontario if there is a crop problem.
The grain and oilseed markets are incorporating a risk premium due to the uncertainty in production. Ontario has received below-normal precipitation over the past 30 days. On March 5, Statistics Canada will release its first acreage estimate for 2026.
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Canada, the U.S. and most of the developed world appear to be heading into a major inflationary period over the next couple of years. On a macro level, this is bullish for grain and oilseed markets. The world is no longer comfortable with past levels of ending stocks. Food security will be more of an issue given fresh trade alliances and deglobalization. If there are one or two problem areas in the Northern Hemisphere during the 2026 growing season, we are in for significantly higher prices. Fertilizer prices are back up to historical highs. Keep all this in mind as you read the following analysis.
Soybeans
Ontario farmers harvested 3.5 million tonnes of soybeans in 2025, down from the 2024 output of 4.3 million tonnes. Canadian crop year-to-date soybean exports for the week ending Feb. 15 were 3.5 million tonnes, up 100,000 tonnes from last year. Crop year-to-date domestic disappearance for the week, at 928,400 tonnes, was down 100,000 tonnes from the year-ago usage. Despite the year-over-year decrease in production, export and domestic demand is running at similar levels to last year. The Ontario domestic market needs to trade high enough to curb exports and to attract imports in the latter part of the crop year.
Finally, the Ontario soybean market needs to strengthen to encourage farmers to increase acreage this spring. At this stage, Ontario soybean prices need to move $1/bu. higher to pull acres away from corn.
U.S. farmers are expected to plant 85 million acres of soybeans this year, according to the U.S. Department of Agriculture. This is up from the 2025 planted area of 81.2 million. U.S. production has the potential to reach 121 million tonnes, up from last year’s crop of 116 million tonnes. Despite the increase in production, the carryout for 2026-27 will finish near 9.7 million tonnes, relatively unchanged from 2025-26 campaign due to an increase on domestic and export demand. There are some drier pockets developing in the U.S. Midwest and northern Plains moving into the spring period. The market will be extremely sensitive to yield and crop development.
U.S. soybeans continue to trade at a premium to South American origin as the Brazilian harvest moves into the final stages. The Argentine soybean crop will be harvested during March and April.
We’ve advised farmers to be 70 per cent sold on their 2025 soybean production. We continue to have a bullish outlook for the soybean market.
Corn
Ontario corn prices have been percolating higher. Certain ethanol processors are well covered for their nearby requirements but there appears to be significant open demand for May through August. We have a bullish outlook for the energy complex which will directly spill over into the corn market. Ethanol processors will have a hard time sourcing adequate supplies late in the crop year, given the tighter stocks situation. On a side note, feedlot operators also need to have full coverage through September. Higher fertilizer prices may hinder corn acreage this spring. New-crop prices will function to encourage production moving forward.
U.S. farmers are expected to plant 94 million acres of corn this spring, down from the 2025 area of 98.8 million, according to USDA. Using a trend yield, U.S. production has potential to finish near 400 million tonnes, down from the 2025 crop of 432 million tonnes. Minnesota, Nebraska, Missouri and Illinois are contending with drier conditions heading into spring.
Brazil’s second corn crop was about 50 per cent planted at the end of February. Conditions have been favourable for early crop development. Traders are concerned about drier conditions during April due to La Niña. The Argentine corn harvest will move into high gear during March. We’re expecting the corn market to develop a significant risk premium in late March and April.
Europe is the main destination for Ontario corn exports in a normal year. Currently, the Ontario corn market is premium to U.S. and French offers keeping Ontario corn at bay. Ontario corn prices will need to maintain a premium over the world market.
This week, we’re advising farmers to sell 20 per cent of their 2025 production bringing total sales to 70 per cent. Ingredion Cardinal Corn bids were hovering at $7 for May delivery. The market is showing a carrying charge which tells farmers to sell now for delivery in May or June.
Wheat
The Ontario winter wheat crop for the 2026 harvest is expected to come in at 2.5 million tonnes, down from the 2025 crop of 2.9 million tonnes. This lower production estimate comes on the heels of a historically tight carryout. Flour millers appear to have open demand for May through July. Currently, Ontario export offers are premium to French values f.o.b. Rouen and U.S. prices f.o.b. the Gulf.
Approximately 40 per cent of the U.S. winter wheat region is contending with some level of drought. The U.S. hard red winter crop in Texas, Oklahoma and parts of Kansas will need timely rains during March and April to sustain yield potential.
In Russia and Ukraine, the ongoing war has also resulted in a cash market risk premium. The latest weapons developments in Ukraine have enhanced the ability to strike Russian grain and energy infrastructure. These Ukrainian-manufactured weapons are not under Western restrictions. Secondly, there are pockets in the Russian Southern District, Volga District and North Caucasus District that have received below-normal precipitation over the past couple of months.
In Germany and Poland, the winter wheat lacked snow cover during a recent cold snap. There is potential for larger than normal winterkill. These regions have also received below-normal precipitation. Romania is also on the drier side while conditions in France have improved.
Analysts are factoring in a year-over-year decrease in production in the U.S., Russia, Europe and Canada. This week, we’re advising farmers to sell 20 per cent of their 2025 production, bringing sales to 60-70 per cent for milling and feed wheat.
Source: Farmtario.com