AM Market Report – February 5, 2026
GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS
OVERNIGHT GRAIN TRADE
Grain markets were generally mixed to firmer overnight, but top end gains are fading as we come into the day session start.
ICE canola futures are slipping around $1/tonne lower to start this morning, giving back a portion of yesterday s $7 to $9/tonne rally inspired by a surge higher Wednesday across the US soy complex.
Chicago soybean futures are trading 8 to 11 cents/bu higher on the front month contracts (old crop), though more cautiously in the deferreds.
US President Donald Trump yesterday announced in a Truth Social post that China is considering buying another 8 MMT of US soybeans this season after recently completing the 12 MMT purchases of US beans the US administration said China had agreed to buy last October. Soybeans surged to a two-month high on the news Wednesday. But worth noting that the soybean market s mid-range close Wednesday was well down from the daily high…and a bit worrisome for the bulls. But beans are higher again this morning…suggesting more price upside is possible in soybeans in the near term. More in the soybean market section below.
Still, I sense that growers should be considering more soybean cash sales on this sudden price bump higher.
CBOT corn futures are fractionally to almost 2 cents lower this morning.
Sluggish US wheat markets are narrowly mixed…a penny either side of unchanged. Ample global supply continues to cap wheat prices. Easing concerns over crop winterkill in Ukraine and Russia following a prolonged period of severe cold in the Black Sea region has added pressure to the wheat market.
In Other News
– Carney, Poilievre to meet one-on-one… Prime Minister Mark Carney and Conservative Leader Pierre Poilievre were pushing for collaboration ahead of a one-on-one meeting on Parliament Hill held on Wednesday. It s the first meeting between the two leaders in 2026 and coincides with the start of winter sitting.
A senior government source told CTV News that the prime minister raised several key issues where he will want to see direct collaboration from the opposition, including the Budget Implementation Act and key funding for programs that will address affordability. The source also said Carney wanted to discuss crime and violence, including legislation to strengthen the criminal code and Bill C-9, which aims to protect places of worship from threats of violence and hate.
Poilievre, meanwhile, spoke to reporters ahead of the meeting, saying he wants to work with the government to address the cost of living. We have been working to fast track anything that we believe, however modest, might make life a little more affordable, little safer, and our economy a little stronger, Poilievre said, later claiming that Carney has been the one holding up the show.
Poilievre also said he wants to support the federal government to address trade tensions between Canada and the United States.
– Stephen Harper calls for Liberals, Conservatives to come together...Former Prime Minister Stephen Harper urged the Liberal and Conservative parties to take on the challenges of our time together as the country stares down two potentially existential threats to its sovereignty: an imperialist US president to the south and separatist movements in Alberta and Quebec.
Speaking at an event this week where his official prime ministerial portrait was unveiled on Parliament Hill, Harper said while the two major parties may differ on some matters of policy, those issues should be secondary to keeping the country together. “In these perilous times both parties, whatever their other differences, must come together against external forces that threaten our independence and against domestic policies that threaten our unity.
“We must preserve Canada, this country handed down to us by providence, preserved by our ancestors and held in trust for our descendants. We must make any sacrifice necessary to preserve the independence and the unity of this blessed land,” he said.
Meantime, at a separate event in Ottawa, Harper said Canada must urgently pivot in the face of an erratic US president and reduce its dependence on the American market to protect its sovereignty and the continued functioning of the economy. Harper said while he has “largely stayed silent” on US aggression up until now, he feels compelled to speak out about what he described as an existential threat. He said the US has become “hostile” and its leader, President Donald Trump, is openly questioning Canadian sovereignty, launching threats and betraying trade deals, which poses a “serious challenge” that demands a muscular response.
While Canadians are “understandingly shocked, bewildered and angry” by what Trump and his enablers have done in recent months, Harper said the country must put emotion aside and focus on policy. He said many in the business community believe “things will go back to the way they were in due course with secure predictable access” to the US market with an American government that “upholds a global order.” “I do not believe that is a safe assumption,” Harper said. “Canada must adapt to new geopolitical realities. To be clear, these realities mean we must reduce our dependence on the US.”
While the US will be the country’s “principal partner” owing to geography and longstanding trade ties, Harper said Canada’s ongoing relationship with the States requires “balanced and sober reflection.”
– Farm profitability threatened… Former leaders of US farm and biofuel organizations as well as former USDA and state agriculture officials this week sent a letter to American lawmakers warning that the dire state of the farm economy risked a “widespread collapse of American agriculture.”
The missive, sent to the leadership of the US House and Senate Agriculture Committees, expressed significant concerns about the state of America s farm economy and the harmful and compounding effect that Administration policies are having on our farmers and on the long-term competitiveness of US agriculture, according to news reports.
The bipartisan group of 27 former ag executives and officials, including former presidents and CEOs of the American Soybean Association, National Corn Growers Association, National Pork Producers Council, National Barley Growers Association, National Milk Producers Federation, US Grains Council, and Renewable Fuels Association, said that farmer bankruptcies have doubled, barely half of all farms will be profitable this year, and noted that the US is running a historic agriculture trade deficit. These metrics reflect a sharp reversal from record farm export surpluses and farm incomes experienced just a few years ago, they wrote.
They said that while the reasons for the dramatic turnaround are complex, it is clear that the current Administration s actions, along with Congressional inaction, have increased costs for farm inputs, disrupted overseas and domestic markets, denied agriculture its reliable labor pool, and defunded critical ag research and staffing…Congress needs to assert itself on behalf of farmers if we are to avoid a widespread collapse of American agriculture and our rural communities.
The letter urged a nine-point plan to stabilize the US farm economy:
1. Immediately exempt all farm inputs from tariffs;
2. Repeal tariffs that are disrupting agriculture export markets;
3. Pass Trade Promotion Authority to enable the Administration to pursue and secure meaningful, enforceable, free trade agreements that can be passed by Congress and have the full force and effect of law;
4. Direct the Administration to prioritize the negotiation of binding trade agreements with countries that need our agricultural products and that can help offset other market disruptions;
5. Encourage the Administration to expeditiously complete the review of the US-Mexico-Canada Agreement, favorably resolve the pending dairy dispute settlement case with Canada, and ensure that the USMCA is extended for the next sixteen years;
6. Pass legislation to enable nationwide E15, year-round ethanol, and sustainable aviation fuel to boost domestic markets for US corn and soybeans;
7. Pass a new farm bill;
8. Pass farm labor reform including reform to the H-2A program; and
9. Restore funding for land-grant agriculture research, critical USDA staffing, and domestic and international food aid programs.
– How India is likely to shield its farmers in US trade deal… India and the United States have struck a trade deal to cut US tariffs on Indian goods to 18% from 50% in exchange for New Delhi halting purchases of Russian oil and lowering trade barriers. Both sides have shared the broad outlines of the deal but not the details, with early indications suggesting India will grant the US only limited access to its agricultural market.
India, which bans genetically modified (GM) food crops, is unlikely to lower tariffs on imported farm goods such as corn, soybeans and soymeal as it seeks to protect millions of small farmers who eke out a living on meagre incomes. The United States primarily produces GM corn and soybeans, limiting the scope for market access in India. Unlike China, which buys millions of tons of corn and soybeans from the US, India’s import requirements for both crops are relatively small.
While India is the world’s largest importer of soyoil, sourcing supplies mainly from Brazil, Argentina and the United States, its overseas purchases of soybeans remain negligible, including from Africa where non-genetically modified oilseeds are produced.
India also has ample supplies of domestically produced ethanol, made from corn, rice and sugarcane, making it unlikely to concede to requests for imports of either ethanol or corn as feedstock for ethanol production.
While the US has pushed for greater access to India’s dairy market, long protected by high import duties and non-tariff barriers, New Delhi is likely to keep the sector off the table given its importance to farmer livelihoods.
India could agree to lowering tariffs or allowing expanded import quotas on farm products such as almonds, walnuts, pistachios, apples, pears and berries. New Delhi could also lower trade barriers for fruits and vegetables, wine and spirits…the areas that do not tend to hurt Indian farmers.
Outside Markets
The Dow Jones Industrial Average rallied 260.31 points higher on Wednesday to settle at 49,501.30, but the S&P 500 finished down 35.09 points at 6,882.72. Early Thursday, the March Dow Jones Futures are down another 227 points.
Global markets are weaker this morning in cautious trading as investors assessed a range of corporate results and concerns over AI valuations persisted. Wall Street futures are lower as markets weighed Alphabet s blowout spending plans against stellar quarterly results. Canada s TSX stock index futures are edging lower this morning as commodity prices declined…after the TSX composite gained 183 points yesterday. European and Asian stock markets were also lower overnight.
The March US Dollar Index is up 0.066 at 97.555. The US dollar index overnight notched a two-week high and has made a strong recovery after hitting a four-year low in late January. The greenback has appreciated amid mostly upbeat US economic data releases and following the announcement from President Trump that he has nominated Kevin Warsh as the next US Federal Reserve chair. Warsh has in the past leaned hawkish on US monetary policy.
The Canadian dollar is steady against its US counterpart…currently quoted at 73.22 US cents.
Mar crude oil futures are down $1.82 at US $63.32/barrel. Oil prices are trending lower this morning after Iran confirmed it will negotiate with the US in Oman on Friday, easing the immediate risk of military strikes against the OPEC producer. Differing positions over the parameters of US-Iran negotiations mean it remains unclear whether the two sides can realistically bridge major differences at a time of heightened tensions in the region, which supplies about a third of the world s crude. That has reinserted a risk premium into oil prices, which have rebounded this year after slumping in the second half of 2025 on signs of a growing global glut, according to a Bloomberg report.
Gold and silver markets have turned wobbly (lower) amid previous metal instability after posting solid recoveries earlier this week. After a record-breaking rally that appeared to run too far, too fast, the metals have retreated from their all-time highs posted in late January. The sudden and sharp decline in precious metals also weighed on sentiment in base metals.
The recent steep downdrafts in gold and silver prices put some downside pressure on many raw commodity futures markets, including the grains, as well as denting risk appetite across the general marketplace.
Grain Markets
Chicago soybean futures are trading 8 to 11 cents/bu higher on front month contract this morning, though trimming back on overnight gains. New crop November futures are up 3 cents. Bean futures were in rally mode on Wednesday following a mid-morning update from President Trump, as contracts closed with front month gains of 25 to 27 cents. Some new crop contracts were up 4 to 11 cents.
A phone call between President Trump and China s President Xi took place on Wednesday morning. Among the discussions, according to a post from Trump…China was considering a lift in US soybean export commitments to 20 MMT for the current season vs the 12 MMT previously stated.
Nearby Mar bean futures rallied 26 cents/bu on Wednesday, combined with a 10 cent gain so far this morning…backing off from a 14 cent overnight gain…has sent prices to their highest since early December. This is all triggered by Trump’s social media post about a phone call with China’s leader, where he requested President Xi to increase Chinese purchases of US soybean purchases. The two are seeking areas of common ground ahead of Trump’s scheduled meeting to Beijing in April. If realized, some analysts see demand rationing being required. But if one of many Trump blusters without substance…this rally is already overdone. China remains silent.
That additional 8 MMT of soybean business to China was not priced into the market. That would equate to nearly 294 million bu of additional sales to China not currently on the balance sheet. Such buying seems unlikely on many fronts, but neither can the possibility be ignored.
Firstly, the US soybean balance sheet doesn’t have another 294 million bu of available soybeans to export, especially if the Americans get a strong biofuel program as expected in a matter of weeks, unless it pushes US prices high enough to send much of their remaining non-China soy export business south to Brazil.
Second…US prices are already roughly 70 cents/bu above Brazilian prices landed at the port in China. Asian crushers have zero financial incentive to buy US soybeans, so the purchases would need to continue being politically-motivated by China’s state grain buyer for its reserve. But it doesn’t have storage for those soybeans. It has two-thirds of the purchased 12 MMT from the US scheduled for delivery by the end of February when crushers would be willing to buy them out of the reserve while waiting for cheaper new crop Brazilian supplies to arrive. The rest are scheduled for delivery between now and August.
Finding room for an additional 8 MMT of US soybeans would mean pushing those beans via auction onto the Chinese crush market to displace Brazilian supplies, driving US prices sharply higher while driving Brazilian basis sharply lower. This seems highly unlikely to occur, but we can’t rule it out because Xi really needs peace with Trump while he shores up his weakened support base at home via the military purge that’s going on there.
Soybean cash sale
Given the uncertainty in fulfillment of these additional US sales to China, the risk of giving up yesterday/today s price strength remains high. As such, I would be inclined to advance grower cash sales another 20% of 2025 production…getting to 60% sold if not already there.
Soymeal futures are mostly $2 to $4/ton higher this morning after gaining $1 to $4/ton yesterday. Soyoil futures are down 24 to 33 points this morning after rallying 101 to 117 points in the nearbys on Wednesday.
USDA this morning reported US soybean export sales of 436,900 tonnes for the week ended Jan 29, which came in at the bottom end of trade expectations ranging between 0.4 and 1.6 MMT.
Chicago corn futures are fractionally to near 2 cents/bu lower this morning. The corn market ended Wednesday s session with contracts a penny to 2 cents higher across the front months. Wednesday’s corn market was wedged between falling wheat prices and a rally in the soybean market.
USDA this morning reported US corn export sales of 1.041 MMT for the week ended Jan 29, which came in near the lower end of trade expectations ranging between 0.8-2.1 MMT.
EIA data from Wednesday morning showed a total of 956,000 barrels per day of US ethanol production in the week ended Jan 30, down 158,000 bpd from the previous week… a multi-year low because of last week s winter storm. Stocks of ethanol were down 264,000 barrels to 25.136 million barrels.
Traders are monitoring South America, with rain in parts of Argentina expected to boost crop ratings. It remains to be seen how much total damage from recent heat/dryness has been done, with most of the impact on early planted corn. The trade is also monitoring the first crop harvest and second crop planting in Brazil.
US wheat markets are very narrowly mixed this morning… Minnie spring wheat futures are up a penny, HRW is fractionally to a penny weaker, while SRW wheat is fractionally mixed. Still complete dullsville in wheat. The US wheat complex was lower across the board on Wednesday…spring wheat ended 2 to 3 cents lower yesterday.
USDA this morning reported US wheat export sales of 373,900 tonnes for the week ended Jan 29, which came in nearer the lower end of trade expectations ranging between 300,000 and 600,000 tonnes.
Large world supplies continues to be the albatross hanging around the wheat market s neck. Russia s 2025 wheat crop totaled 93 MMT according to the country s data, including Russian held territories of Ukraine.
CANADIAN GRAIN MARKET
ICE canola futures rode the coattails of the Chicago soy complex higher on Wednesday. Nearby soybean futures surged after US President Donald Trump wrote on Truth Social following a call with Chinese leader Xi Jinping that China might consider purchasing up to 20 MMT of American soybeans in the current marketing year. Beijing in late October agreed to purchase 12 MMT, a target that has already been hit. Soyoil and meal rallied higher on the day as well.
Gains in crude oil and losses in the Canadian dollar were also supportive for canola. Malaysian palm oil provided little direction, while European rapeseed was higher.
On the other side, large domestic supplies following a record 2025 harvest continue to overhang the canola market.
March canola jumped $9.80 higher to close yesterday to $659.10/tonne, and November was $7 higher at $668.80.
For today… canola futures are very modestly weaker to start this morning…currently steady to less than $1/tonne lower in pause from yesterday US soy complex-inspired rally. Mar canola is up $0.20 at $659.30/tonne. Yesterday s $9.80 rally for the first time convincingly pushed the Mar contract up through chart resistance at the $650/t level following numerous failed attempts. That s good news…and potentially opens the door to a test of the next upside technical target…the November high around the $670/t mark. The 20-day moving average crossing up and over the 50- day and now the 100-day average is also encouraging.
It’s worth noting that part of the recent support in canola futures came from the US 45Z biofuel production tax credit proposal this week confirming Canadian canola would be included. But soyoil is slightly weaker this morning…along with palm oil and EU rapeseed…which will be a drag on canola. And honestly, I don t have great confidence that the Trump social media post will be a trigger for a new wave of US soybean export sales to China. But hey, who knows?
While I am inclined to advance cash soybean sales right now…I might consider holding off on canola for the moment on the strength of more encouraging US biofuel developments (though many details still lacking) that s lifting soyoil futures generally of late, and the recent restart of Chinese demand for Canadian canola.
Still…an approach of $15/bu cash sales opportunities for spring delivery positions is likely to get my selling shoes on.
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