There is lots going on this week to add to an already pretty volatile market environment. The good news is that it's mostly good news (except for fuel & fertilizer).

 

US/Iran conflict is adding a massive amount of uncertainty in the oil market. We have already seen crude oil leave a $2/bbl gap on the chart and rally 10% in 2 days. It's all about the Strait of Hormuz, which routes around 20% of the world's oil supply. If the Strait sees slowdowns for a week or two, the market can handle that. But, if the Strait gets blocked for a long period of time, some energy forecasters are calling for triple-digit barrel values. That would push fuel, fertilizer, and vegetable oil prices even higher. Good on one hand, not good on the other.

 

War generally means higher grain, oilseeds, and pulses, but by how much is a hard one to determine. Iran is a big importer of ag products ranking top 7 for corn, top 3 for barley, top 12 for wheat, and somewhere in the top 20's on pulses. We are monitoring prices for any adjustments this week in reaction to the war escalating. Iran ranks top 12-14 for wheat & barley production globally, so it's not as significant on the production side.

 

China issued it's final ruling on it's anti-dumping investigation on Canadian canola seed. The duty was cut from 75.8% to 5.9%. That plus the normal import tax puts the total tariff at ~15%. This is effective now and valid for the next 5 years. This should be big because China is Canada's #2 canola export market next to the US. China also suspended tariffs on peas and canola meal. They went from 100% to 0%. Canola meal is an important feed for China's livestock and they often use yellow peas as a soymeal substitute as well. China publishes trade flows around the second week of the following month typically. So we should get a better sense of how much they are importing no later than early April.

 

We also have Canada & India inking a major trade alliance this week after formally launching negotiations toward a Comprehensive Economic Partnership Agreement (CEPA). The deal is expected to be in place by the end of this year, which includes up to $50 billion in bilateral trade (currently only ~$9 billion). The big highlight was a uranium deal, but there was also mention of creating a Canada-India Pulse Protein Centre of Excellence focused on pulse research and processing. That signals our pulses are important to India, but does not guarantee tariff removal, because India likes to protect their farmers through the use of tariffs and MSP's.

 

The bigger factor to watch is the forecast in March. Right now, they are calling for hotter-than-normal temperatures and more heatwave days throughout the month for India. This is important because Rabi crops are in the filling/maturity stages this month. Excessive heat can cut yields, increase domestic prices, and increase the probability of tariffs not being increased. We did see a report that lentil tariffs might increase from 10-30% in March, so it will be interesting to see if that plan changes as the temperature cranks up.

 

ABARES released their 'mostly gone unnoticed' Australian crop report yesterday. All the activity surrounding US/Iran cast a big shadow over these smaller S&D reports this week. They noted some bigger-than-expected final crops for last season. The third largest wheat crop ever, the second largest canola crop, and a record production of barley. What I think is more important is their forward outlook for the upcoming winter crop season. They are flagging some potential dryness ahead and below-average rainfall. That could shrink the next crop, but this is low risk with the crop being many months away.

 

Stats Canada is releasing their 2026 crop acreage report on Thursday March 5th. The biggest storyline going into the report is less pulse acreage (down 10-12%) due to large carryout stocks, trade uncertainty, and stronger competing crops. Canola acres are likely going to continue to increase due to competitive returns, strong crush (& now maybe export) demand, and crop rotation. A surprise above 23 million acres would be a negative hit for the market. Wheat and durum are expected to be steady to maybe slightly lower. Barley will be an interesting one to watch as area is expected to increase modestly, but feed demand is through the roof right now. We will provide a full update on the numbers on Thursday.

 

These are just some of the events pushing and pulling markets around right now. We also have biofuel policy framework in discussion, El Nino forecasts, South American harvest, USMCA discussion and other Trump trade talks, Black Sea/EU winter crop outlooks, and our own (North American) crop conditions coming up soon. We will save those discussions for our news update tomorrow.

 

Canola & bean oil have been enjoying this crude swing, but bean oil is fading a bit on Tuesday. $725-730/T is the next resistance (75% retracement) to watch for on May, July, and November canola futures. Any further strength will be determined by how all these events unfold in the coming weeks. Bean oil falling below 61.50 would likely be one other indication to make some more sales on canola.

 

Wheat futures have been back & forth so far this week, but Min & Kan are still holding trendline & top of old range support levels. $6.50/bu is a number to watch for on May & July Minneapolis futures and $6.70/bu on September futures. You can use $6/bu on May/July Kansas and $6.30/bu on September futures. These are resistances based on retracement levels. We are also monitoring for any sell signals or reasons for markets to break through resistance and run even higher.

 

Soy futures are back & forth testing the resistance at $11.77/bu on the May contract. A successful break above that level would signal back to $12/bu+ futures. We were close to making a rec on Monday's big reversal, but decided to hold off because of the US/Iran volatility. Same story on corn futures. They had a reversal on Monday, but faired a bit better on Tuesday. Another move past $4.50/bu would help confirm .20-.30/bu upside. It's baby steps for corn at the moment.

 

We have noted some strength in green lentils this week with some LGL offers back to .27/lb. Red lentils seem to be sticking around the .25/lb, while SGL bids are silent so far this week. Peas haven't moved up at all on the China announcement. Yellows actually have corrected about .20/bu this week, and green/maples are holding more steady. We are still weighing the risk/reward of waiting for .50/bu seasonal upside on peas, and .02-.04/lb on lentils into April-May.

 

Feed & durum values are holding steady this week. You can use current prices for some short-term sales. We are holding 20-30% back for a possible .50/bu increase before the end of the crop year. There are no new recs on flax, rye, canary, chickpeas, or mustard. Just waiting for a little upside or some sell signals.

 

We will check in with you again tomorrow when we send our In The News update. On Thursday, we will be sending out the Stats Canada info first thing and our Q&A update later in the day. Hope you're having a great week!