The long-term effects of the war on grain and oilseed markets remain to be seen, with day-to-day volatility the likely feature in the near-term.

Against that uncertain backdrop, the underlying supply/demand fundamentals have not disappeared. A quick resolution to the war seems unlikely at this time, which means kneejerk reactions in the markets to the latest developments could subside.

Spring planting

Fertilizer and fuel costs are high, but crops will still be planted this spring. While rotational considerations generally take precedence, there’s always room for some adjustments on the margins.

For canola, the early call from Statistics Canada was for a one per cent increase in canola area on the year, to 21.8 million acres. That survey was conducted before China loosened its import restrictions, leading some analysts to predict actual area will end up even larger.

However, the rise in fertilizer costs due to the war and reduced traffic through the Strait of Hormuz has also led to speculation that high input costs may see some intended canola area go to other less input-intensive crops. In Manitoba, that could mean more soybeans, which were already forecast to see a 12.9 per cent increase in area in the province.

The United States Department of Agriculture releases its much-anticipated prospective plantings report on March 31. The trade sentiment is that corn area will be cut by three to five million acres from the 98.8 million acres planted in 2025, with that area shifting to soybeans, which are expected to see a similar increase from the 81.2 million grown last year.

Old-crop stocks

There is no shortage of old-crop canola after a bumper harvest in 2025 and slow exports for most of the marketing year. Soybean and corn supplies in the U.S. are also very comfortable. That should be limiting the upside potential in the nearby futures.

Statistics Canada will release their March 31 stocks report on May 6. Given the usage numbers so far, there could be about three million more tonnes of canola on hand at this time of year compared to the 6.5 million tonnes reported as of March 31, 2025. Domestic crush margins are very profitable, but the processors are generally thought to be covered for the time being. In addition, it remains to be seen how much extra canola China will purchase.

Biofuel

New U.S. biofuel blending mandates have been in the works for months but are apparently close to being announced. At the time of writing, President Donald Trump was expected to hold an event celebrating farmers at the White House on March 27. Faced with mounting animosity from farmers dealing with Trump’s tariff policies and the fallout from the war in Iran, the National Agriculture Day meetings could present a prime opportunity for the president to appease a key segment of his voting base.

Most analysts don’t expect the blending rules to differ substantially from volumes proposed by the U.S. Environmental Protection Agency before the war, but added clarity would be supportive for corn and oilseed prices. That would also support canola.

South America

While the North American growing season may be just around the corner, harvest operations are underway in the south. Brazil is expected to be bringing in a record-large soybean crop, which should be a limiting factor for oilseeds as they respond to the larger war-related moves in the energy and financial markets.

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AAFC cautioned that the conflict in Iran “has heightened geopolitical tensions and market volatility,” and noted that planting decisions could be altered while “the report is based on information and trade policies in effect as of March 11, 2026.”

Canola

• Projected canola ending stocks for 2025-26 were left unchanged at 2.76 million tonnes, while the 2026-27 forecast was cut by 200,000 tonnes from February at 1.46 million tonnes.

• Given average yields, AAFC forecast Canadian canola production in 2026-27 at 19.20 million tonnes, which was unchanged from the February estimate and down from the 21.80 million tonnes grown in 2025-26.

Wheat

• New crop wheat ending stocks were raised to 5.75 million tonnes from 5.70 million in February, while the 2025-26 wheat carryout held at 7.35 million tonnes.

• AAFC raised its call on wheat production to 35.01 million tonnes, from 34.98 million the previous month. That would still be well below the 39.96 million tonnes harvested in 2025-26.

Pulses

• Other notable revisions included slight increases in pea and lentil production estimates, with ending stocks of the two pulses also up by 100,000 tonnes each from the previous forecast.

• The pea carryout for 2026-27 was raised to 945,000 tonnes from 845,000 tonnes in February, while lentils were forecast at 1.67 million from 1.57 million tonnes.

• Pea ending stocks for the current marketing year are estimated at 1.31 million tonnes with lentils at 1.695 million tonnes.

Soybeans/Corn

• Corn ending stocks for both 2025-26 and 2026-27 were left at 2.00 million tonnes.

• Soybean carryout for 2026-27 was cut by 50,000 tonnes from February, at 693,000 tonnes, which compares with 443,000 for the current marketing year.

March estimates for Canadian major crops supply and demand: in million tonnes. Source: Agriculture and Agri-Food Canada.

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• · Estimated wheat ending stocks grew to 7.500 million tonnes, from 5.100 million in November and 4.112 million in 2024/25. Wheat exports for 2025/26 were raised to 28.350 million, from 27.700 million in November but still below the 29.220 million that moved in 2024/25.
• · Projected canola ending stocks for 2025/26 were up by 450,000 tonnes from November, at 2.950 million tonnes. That compares with 1.597 million in 2024/25. Canola exports at 8.000 million tonnes compare with 7.000 million in November. However, that would still be down by 1.3 million tonnes on the year. Domestic canola usage was forecast to hit a record 12.000 million tonnes.
• · The barley carryout was raised to 1.5 million tonnes, from 1.000 million in November and 1.249 million tonnes the previous year.
• · Ending stocks for peas and lentils were both forecast to be roughly three-times the carryout from 2024/25 at 1.568 million tonnes and 1.535 million tonnes respectively.
• · Downward revisions to soybean and corn production by Statistics Canada led to reductions in the ending stocks forecasts from AAFC. Soybean ending stocks were down by 100,000 tonnes from November at 400,000 tonnes, while the corn carryout was cut by 300,000 tonnes at 1.600 million tonnes.

December estimates for Canadian major crops supply and demand: in million tonnes. Source: Agriculture and Agri-Food Canada.

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Noting that “geopolitical risks and trade uncertainties have heightened volatility in both Canadian and international grain markets,” AAFC said its forecasts were based off the current trade policies and could easily be altered in subsequent reports.

China imposed 100 per cent tariffs on Canadian canola oil, meal, and peas beginning March 20, while the U.S. has set April 2 as its next tariff date.

AAFC raised its call for 2025/26 canola ending stocks to 2.000 million tonnes, which compares with the February estimate of 1.000 million tonnes and the 2024/25 projection of 1.300 million tonnes.

While anticipated canola exports were revised slightly higher from the February forecast, they would still be down by 1.500 million tonnes on the year at 6.000 million. Meanwhile, projected domestic canola usage for 2025/26 was forecast at 11.400 million tonnes — down by a million tonnes from the February forecast.

“The reduced (domestic usage) forecast is tentative and may decline further if proposed tariffs and trade disturbances materialize,” said AAFC adding “the crush forecast may revert to last month’s estimates if policies stabilize, and plants operate at full capacity.

Meanwhile, AAFC expects Canadian pea exports will fall sharply from the current crop year with the expectation that current Chinese import tariffs continue and the non-import dry pea tariff exemption from India expires on May 31, 2025. Carry-out pea stocks are expected to rise to the record level of 1.775 million tonnes, from 700,000 for 2024/25.

March estimates for Canadian major crops supply and demand: in million tonnes. Source: Agriculture and Agri-Food Canada.

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Canola ending stocks for 2024-25 were forecast at 2.200 million tonnes, down by 300,000 from the September estimate. That compares with the downwardly revised 2.748 million tonnes of canola carried forward from 2023-24. Usage numbers for 2024-25 were relatively unchanged, with exports steady at 7.500 million tonnes and domestic usage down by only 45,000 tonnes from September at 12.128 million tonnes.

Wheat ending stocks for 2024-25 were lowered to 4.900 million tonnes, from 5.050 million tonnes in September. Total Canadian wheat exports for 2024-25 were raised by 100,000 tonnes, to 25.400 million tonnes, which would be in line with the 25.334 million tonnes exported in 2023-24.

October estimates for Canadian major crops supply and demand: in million metric tonnes. Source: Agriculture and Agri-Food Canada.

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Overall, the agency’s projections for next year were either steady or lower than what the trade expected.

U.S. wheat production for 2024-25 was estimated at 1.858 billion bushels, which was below average trade guesses but slightly above the 1.812 million tonnes grown in 2023-24. Average wheat yields were forecast to increase slightly on the year at 48.9 bushels per acre.

Exports for 2024-25 were estimated at 775 million bushels, up from 720 million in 2023-24. Ending stocks for 2023-24 were projected at 688 million bushels, down eight million from the trade’s average estimate, while those for 2024-25 were at 766 million bushels, down 20 million from trade expectations.

Global wheat production for 2024-25 was pegged at 798.19 million tonnes, slightly ahead of 787.72 million in 2023-24. World ending stocks for 2023-24 were set to be 257.8 million, 900,000 above the average trade estimate, while those for 2024-25 were 253.61 million, down 3.76 million from the average trade guess. Canada was set to produce 34 million tonnes of wheat in 2024-25 with ending stocks at 3.12 million.

New crop U.S. corn production was estimated at 14.86 billion bushels, slightly down from the average trade guess but 482 million lower from 2023-24. Ninety million acres were projected to be planted in 2024-25 with an average yield per harvested acre of 181 bu./ac.

U.S. corn exports were expected to rise 50 million bushels to 2.2 billion in 2024-25 to go with ending stocks at 2.102 billion. The latter figure is down from the 2.284 billion projected by the trade but up from 2.022 billion in 2023-24.

Global corn production for 2024-25 was estimated at 1.220 billion tonnes, down from 1.228 billion the previous year. World carryout for 2024-25 was pegged at 312.27 million tonnes, relatively steady from the year prior. Brazilian corn production for 2023-24 was set for 122 million tonnes by the USDA and for 127 million in 2024-25. The Argentine corn crops were projected to be 53 million tonnes in 2023-24 and 51 million in 2024-25.

Soybean production in the U.S. was projected at 4.45 billion bushels, close to the average trade estimate and up 285 million from 2023-24. Planted acres were expected to total 86.5 million acres for 2024-25 with an average yield per harvested acre of 52 bu./ac.

U.S. soybean exports for 2024-25 were set to increase by 125 million bushels from the previous year at 1.825 billion. Ending stocks for 2024-25 may rise by 105 million bushels from the previous year at 445 million, with figures for both years close to trade estimates.

World soybean production for 2024-25 was pegged at 422.26 million tonnes, up from 396.95 million the previous year. Global ending stocks for 2024-25 were set for 128.5 million tonnes, up 7.63 million from the average guess, while those for 2023-24 were slated to be 111.78 million, slightly below the average trade estimate.

The estimated Brazilian soybean crop was at 169 million tonnes for 2024-25, up 15 million from the previous year. Argentina’s soybean crop was expected to be 51 million for new crop, up one million from 2023-24.

—Adam Peleshaty reports for MarketsFarm from Stonewall, Man. 

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Factoring updated acreage estimates from Statistics Canada, AAFC lowered their call for Canadian canola production in 2024/25 to 18.100 million tonnes, from 18.365 million in February. That compares with 18.328 million tonnes in the current 2023/24 marketing year. Projected exports were left unchanged at 7.000 million tonnes for 2023/24 and at 7.700 million in the new crop year. With only minor revisions to the domestic usage projections, canola ending stocks are now forecast to tighten to 1.650 million tonnes for 2024/25, from a projected 2.000 million in 2023/24.

For wheat, total production was estimated at 34.593 million tonnes by the government agency. That was up by 667,000 tonnes from the February estimate and well above the 31.954 million tonnes grown in 2023/24. Canadian wheat ending stocks are forecast to rise to 4.400 million tonnes by the end of July 2025, which would be up by 200,000 tonnes from the February estimate and compares with the projected 2023/24 wheat carryout of 3.550 million tonnes.

AAFC March estimates for Canadian major crops supply and demand (in million metric tonnes):

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The USDA upped its call for 2023/24 U.S. soybean carryout to 315 million bushels, which topped average trade guesses and compares with the previous estimate of 280 million bushels. The world soybean ending stocks for the marketing year were increased to 116.0 million tonnes, which compares with the January forecast of 114.6 million tonnes and the 2022/23 carryout of 103.6 million tonnes.

Brazil’s soybean crop was pegged at 156 million tonnes by the government agency, which was down by only a million tonnes from the January forecast and well above average trade guesses closer to 153 million tonnes. Brazil’s Conab placed the country’s soybean crop at only 149.4 million tonnes in its own report out earlier in the day. The USDA left its call for Argentina’s soybean production unchanged at 50.0 million tonnes, double what was grown during the previous drought-stricken year.

For corn, the USDA raised its U.S. ending stocks estimate by 0.5 per cent at 2.172 billion bushels but lowered its world carryout to 322.2 million tonnes from 325.2 million in January. Brazil’s expected corn production was down by three million tonnes on the month at 127 million tonnes, while Argentina’s corn crop was left unchanged at 55.0 million tonnes.

The U.S. wheat carryout was forecast at 658 million bushels, which compares with the January estimate of 648 million bushels and the 570 million bushels seen at the end of the 2022/23 marketing year. World wheat ending stocks were estimated at 259.4 million tonnes, which was down only slightly from the 260.0 million tonnes forecast in January but well below the 2022/23 world wheat carryout of 271.2 million tonnes.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg. 

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Canadian canola stocks as of Dec. 31, 2023, came in at 12.9 million tonnes, which was up 1.3 per cent from the same time the previous year but slightly below the five-year average of 13.3 million tonnes. On-farm stocks were up 5.6 per cent from the same time the previous year, at 11.7 million tonnes, while commercial stocks fell 27.7 per cent at 1.2 million tonnes. Some market participants had anticipated even larger on-farm stocks, given the slower export pace during the crop year-to-date.

Meanwhile, total wheat stocks were down 10.3 per cent on the year at 20.7 million tonnes. On-farm stocks fell 11.7 per cent to come in at 16.7 million tonnes while commercial holdings were down 4.2 per cent at 4.0 million tonnes. Canadian wheat exports through the first five months of the crop year were up 2.7 per cent at 10.6 million tonnes.

Barley stocks increased to 5.5 million tonnes, from 5.2 million tonnes at the end of December 2022. The increased stocks came despite the smaller crop, as domestic usage declined 16.6 per cent on the year, according to StatCan.

Oats stocks were down 40.3 per cent year over year at 2.1 million tonnes. Pea and lentil stocks were down 15.6 per cent and 30.5 per cent respectively, at 1.8 million tonnes for peas and 1.0 million tonnes for lentils.

Corn stocks in the country were down 4.8 per cent at 11.3 million tonnes, while soybean supplies increased 9.8 per cent to come in at 3.8 million tonnes.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg. 

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“For 2024/25, rotation considerations, moisture conditions, expected prices and input costs/availability are expected to the main factors determining seeding decisions in the spring. The average yield and production for most crops is forecast to increase year-over-year based on a return to trend yields, assuming normal weather conditions,” AAFC stated in its report.

For Canada’s largest pulse crops, dry pea production was pegged at 3.1 million tonnes for 2024/25, up from this year’s 2.61 million, and lentils increased to 2.2 million tonnes from 1.67 million.

AAFC cited more planted area in 2024/25 as the reason for the gains. Dry peas were projected to rise to 3.21 million acres compared to 3.05 million in 2023/24, and lentils were set to expand to 3.95 million acres from 3.67 million.

Exports saw slight upticks, with dry peas inching up from 2.3 million tonnes in 2024/25 from this year’s 2.2 million, and lentils nudged up to 1.8 million tonnes to 1.6 million.

Domestic usage remained small, with AAFC keeping their numbers relatively steady. Dry peas were projected at 700,000 tonnes from the 676,000 in 2023/24 and lentils went to 265,000 tonnes from 263,000.

There were notable changes in ending stocks, as AAFC upped their forecast in dry peas to 400,000 tonnes from the 270,000 in 2023/24. That for lentils was more than quadrupled, with AAFC calling for 260,000 tonnes in 2024/25 from a mere 50,000 this year.

In terms of prices dry peas have seen some significant increases over the week, with Prairie Ag Hotwire noting a 75-cent-per bushel spike for green peas in Western Canadian at C$14 to C$18.75/bu. delivered as of Jan. 22. Yellow peas across the region rose 31 cents at C$11.52 to C$12.75/bu.

Prairie Ag Hotwire noted lentils during the week were steady to higher, depending on the variety. Regardless of size, Lairds were up three cents a pound, ranging from 56 to 75 cents/lb. delivered, while Richleas gained one to four cents at 50 to 73 cents/lb. Also, Crimsons were steady to up two cents at 25 to 37.4 cents/lb and Estons held steady at 49.5 to 66 cents/lb.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

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