I guess you do take the escalator up and the elevator down. In a piece I wrote about corn prices last week, I wondered where we are on that escalator up in prices. (See https://www.dtnpf.com/…). It seems rather silly now after the USDA report. On June 12, the USDA came out with some totally off-the-chart numbers on the bearish side. (See https://www.dtnpf.com/… and https://www.dtnpf.com/…)

Corn prices plunged $0.24 on the day. Yes, we took the elevator down, but you never know what's going to happen ahead.

The USDA report released Jan. 12 was very bearish raising the corn production number in the United States to something that at one time I could have never dreamt up. Last Monday, U.S. corn production was raised to 17.02 billion bushels (bb) by raising the corn yield 0.5 bushels per acre (bpa) and increasing harvested acreage. Corn yield now in the U.S. is 186.5 bpa, which is way above pre-report analyst estimates. Those people had me thinking that we were going to shave a little bit off the domestic corn yield number based on who knows what.

I found it a bit hard to believe, even though I always say that future spreads and basis movement is far more important than USDA numbers. We always should keep in mind that fundamentals win in the end and USDA numbers are dialed into the algorithms. When USDA number comes in lower than expected, the algorithms are set to buy and the opposite to sell. However, I'm wondering where USDA found all those corn acres when they said last July, we'd be about 4.5 million acres below where we are now. How can you be so wrong and keep your credibility?

I am not sure, but I don't think I should spend much time dwelling on it. I tend to think that we'll get back that $0.24 but it might take several weeks. Of course, we have to keep our mind on futures spreads, basis values and what's going on in the marketplace. Last week I mused that low corn prices had actually built demand and now we have just added fuel to that fire.

Soybeans drifted down in sympathy with corn, but the numbers from the report didn't say a lot. We will have 4.262 bb of beans as the final number of 2025, which is up a bit from the December estimate. However, it is in range with pre-report estimates. With soybeans drifting down since mid-October, it just seemed more of the same. Weather in Brazil has been benign, and USDA is still looking at a Brazilian corn crop now predicted to be 178 million metric tons.

What does all this mean other than "trade wars are easy to win?" Well, it's just a long story. If we look back on 2025, there were very few opportunities to price grain above where we find it now. For corn, it was in the early spring leading up to Jan. 11 of this year and for soybeans it was in mid-October. Who knew? It's this way because there is an abundance of supply and with that overabundance, opportunity to price above the average doesn't come along very often. And as I look into 2026, that's all I see again.

For those of us who grow corn and soybeans, you probably farmed them enough to know that there will be opportunity at some point. The weather does not play nice every year. However, for many in Ontario who grow corn and soybeans, we also often have wheat in our rotation and wheat prices in 2025 redefined "nothing happening." As you all know, wheat is planted and harvested in each month of the year somewhere in the world. That keeps a cap on our prices only a war could change. Last time that happened was in 2022 when some of us got $15 a bushel for our wheat. It's now worth less than $6.50 for July.

The Canadian dollar finished Thursday at 0.71995 U.S. At the same time, Canada's Prime Minister was in China to try to break the impasse with the Chinese over its canola, pork and seafood tariffs which have severely hampered those sectors.

By noon on Friday, the canola industry put out a press release welcomed that significant progress was made on the tariffs.

"The Canola Council of Canada (CCC) and Canadian Canola Growers Association (CCGA) welcome the announcement made today in Beijing to provide significant tariff relief for Canadian canola seed and meal. Under the agreement reached between Canada and China, tariffs on Canadian canola seed imports are expected to be reduced to 15% as of March 1, 2026, and the current 100% tariffs on canola meal are expected to be removed as of March 1, 2026, until at least the end of the calendar year."

The press release noted, "Canadian exports of canola and canola products to China were valued at approximately $5 billion in 2024. For 2025, export value to China is expected to plummet to less than half that amount. China is Canada's largest market for canola seed and second largest market for canola meal."

At the same time, the American dollar is a bit weaker, but it's not showing up in a much stronger Canadian dollar. At a certain point with the trade agreement with China and a possible agreement with the U.S. in 2026, we should see the loonie go higher. However, there are some large assumptions there and so far, 72 cents U.S. seems to be doing it.

In the balance are Ontario and Quebec farmers currently ensconced in a Canadian winter with their production and marketing plans before them. The challenge they face is to remain patient without becoming complacent, disciplined without becoming paralyzed, all while navigating a market increasingly driven by USDA numbers that seem to be from the Wizard of Oz. That reality means opportunities will be created not by perfect fundamentals, but by overreaction and adjustment. The job now is to manage basis, watch spreads, protect the downside, and be ready when that next window opens. Daily market intelligence will remain key.

**

The views expressed are those of the individual author and not necessarily those of DTN, its management or employees.

Philip Shaw can be reached at philip@philipshaw.ca

Follow him on social platform X @Agridome

(c) Copyright 2026 DTN, LLC. All rights reserved.