PRAIRIE ROUTES
NEWS

Good morning, bitter cold will continue to grip the Canadian prairies this week, with daytime highs mostly between –18°C and –25°C and overnight lows frequently in the –25°C to –35°C range, especially where skies clear and snow cover is deep. Light, powdery snow and flurries will be common, with heavier bands favoring southern Alberta and southwestern Saskatchewan at times, adding to already deep snowpacks and keeping travel and livestock conditions challenging.

MARKET PULSE

Commodity Market Update

Jan & Feb futures brief for today

Canadian Spring Wheat (Mar '26) is holding near USD $5.29/bu (roughly CAD $7.47/bu), benefiting from steady export demand as global supplies remain ample but Western Canadian wheat quality continues to command premiums. Basis levels on the Prairies remain firm at CAD $1.20-$1.50/bu under March futures, reflecting strong commercial demand for Canadian CWRS wheat. The key factor: processors and exporters are actively bidding for supplies, with year-to-date export pace well ahead of last year despite record production. ​​

Corn (Mar '26) is testing June highs near USD $4.40/bu as the USDA's latest WASDE cut U.S. ending stocks by 125 million bushels entirely on export strength. For Canadian producers, this is bullish backdrop, old-crop corn basis in Ontario and Quebec is running CAD $1.35-$2.12 over March futures, the strongest levels seen in months. The U.S. exported large new sales to Colombia and Mexico, with overall commitments well above last season. New-crop basis is also attractive at CAD $1.15-$1.45 over December 2026 futures. ​

Canadian Soybeans (Jan '26) are trading at USD $10.76/bu, down from earlier in the week but holding support above the USD $10.50 level. The real issue: Chinese demand remains a ghost. U.S. shipments continue to trail last year by 45%. However, some analysts are betting the USDA could trim soybean yields in the January report by as much as 2 bu/acre, which would carve 160 million bushels off ending stocks and potentially set up a bullish setup for Q1 2026. Canadian soybean basis is running CAD $3.18-$3.50 over January futures, reflecting decent demand, but the fundamental picture is bearish without Chinese buying materializing.​

Live Cattle (Feb '26) are near USD $228.95/cwt (roughly CAD $315/cwt), with feeder cattle showing particular strength as North American feeder supplies remain critically tight. Canadian feedlots are chasing inventory aggressively, and cash trade last week saw most of the country trading around USD $230/cwt, with some northern sales reaching USD $234/cwt. The structural driver: the North American cattle herd is at multi-decade lows, and packers face massive underutilized capacity. This creates a genuine floor under cattle prices heading into 2026.​​

Crude Oil (Jan '26) has plummeted to USD $56.10/barrel, the lowest since early 2021. The culprit: renewed optimism over a Russia-Ukraine peace deal combined with persistent oversupply concerns, with WTI touching lows near USD $55.10 intraday. For Canadian energy-intensive operations (like ammonia fertilizer production), this sharp decline in crude is deflationary for input costs heading into 2026 planning. However, this also underscores the structural weakness in energy markets that could weigh on farm inputs and input availability.​​

How to position into the day

• Cattle: The trend is up on structural supply tightness. Feeders are in particularly strong hands.

• Hogs: High weights remain a headwind. Watch for signs of production cuts to create tactical longs.

• Energy: Crude and nat-gas are in structural downtrends. Input costs are easing for 2026 planning, which is the silver lining.

Not financial advice.
Data sources: Grain Farmers of Ontario, Barchart.com, TradingEconomics.com,

TRENDS

📈 The Bulls and 📉 The Bears

📈 Bullish:

• Western Canadian Farmers Delivering Record Harvests Despite Climate Challenges - Despite climate volatility, Western Canadian farmers are delivering record harvests in 2025, demonstrating technological resilience and adaptive management practices. Farmers like Simon Ellis are using precision agriculture, modern genetics, and soil management to maximize yields even as weather patterns become less predictable. ​

• March Corn Spread Tightens; Old-Crop Demand Stronger Than Expected - The March/December corn spread has tightened significantly from last month, now priced at just 8.25 cents lower, half the discount from November. This compression reflects genuine old-crop demand, with U.S. exporters booking large new sales to Colombia and Mexico and commitments running well ahead of last year. ​

• Feeder Cattle Supply Shortage Accelerates; Feeders Command Strong Premiums - North American feeder cattle supplies are critically tight, with feedlots aggressively bidding to secure incoming inventory. This structural supply shortage is driving feeder premiums higher and creating a genuine floor for live cattle prices heading into 2026. ​

📉 Bearish:

• Crude Oil Crashes to Early-2021 Lows; Peace Deal Fears Overwhelming Supply Calculus - WTI crude oil has plummeted below USD $55/barrel, the lowest since April 2021 as renewed optimism over a Russia-Ukraine peace deal combines with persistent oversupply concerns. A peace deal would unlock greater exports of Russian oil, further increasing global availability. The structural oversupply backdrop for 2026 is the primary pressure, with crude vulnerable to further downside toward USD $50/barrel. ​

• Soybean Exports Remain Dire; Zero China Shipments Despite Tariff Suspension - Despite the November tariff suspension on U.S. goods by China, U.S. soybean exports remain at 45% below last year's pace with absolutely zero shipments to China during recent reporting periods. The "hope" that drove the November rally has proven to be a false bottom, and South American weather remains benign, pointing to another record harvest headed to market in Q1 2026. ​

• Canola Spiral Accelerates; January Contract Breaks Below CAD $610 Support - Canola futures have broken through the CAD $610 psychological level, with the January contract trading near CAD $603 on December 15, down nearly 8% over the past month. The record 21.8 million tonne Canadian crop has overwhelmed the market, and the lack of Chinese demand is the structural bear. Technical support is weak, and a break below CAD $600 could trigger further capitulation selling toward CAD $580.​

Want to Sell More Meat and Grain—Profitably?

Prairie Routes connects family farms with seasoned experts for 1-on-1 coaching tailored to your business. Whether you’re looking to grow your market, boost margins, or streamline sales, we’re here to help.

Book your free consult today and see how we can help your farm thrive.

INCASE YOU MISSED IT

Quick Hits on Policy and Relevant News

Quick Hits on Policy and Relevant News

🚜 USDA Raises Global Rapeseed Production to Record High
The U.S. Department of Agriculture has raised its 2025-26 global rapeseed production estimate to a new peak of 95.27 MMT, up 3 MMT from last month's projection and 10.8% above the 2024-25 global crop. The increase is driven almost entirely by Canada's record large canola crop, which the USDA updated to 22 MMT following Statistics Canada's official report.​

🐄 Western Canadian Fed Cattle Market Rebounds; Alberta Prices Jump $5.66/cwt
The western Canadian fed cattle market saw prices surge during the week ending December 5, with Alberta fed steer prices climbing $5.66/cwt to close at $291.46/cwt. Fed heifers finished the week at $288.87/cwt, up $6/cwt from the previous week. Dressed sales were reported in the $485-$490/cwt range delivered, $5-$10/cwt higher than the previous week.​

🐄 Feeder Market Sees Wide Price Range; Weather and Quality Concerns Weigh on Values
Feeder cattle markets across Western Canada traded in a wide range of $10 higher to $10 lower for the week ending December 13, with overall volumes lower compared to previous weeks. Adverse weather and variable quality contributed to price swings across the Prairies. Major feedlot operations showed aggressive bidding for larger packages of pre-conditioned calves, though higher flesh weights at this time of year limited upside potential.​

🏛️ Canadian Agriculture Groups Demand CUSMA Remain Unchanged; No Support for Treaty Weakening
Canadian agricultural groups have sent a forceful message to the federal government requesting that the CUSMA trade deal remain unchanged heading into its 2026 review. The Canadian Federation of Agriculture and allied groups emphasized that any weakening of provisions or negative changes to the agreement would harm the agricultural sector's stability and competitiveness in the integrated North American market.​

💰 Farmers Not Seeking Ad Hoc Payments Despite Trump's $12B U.S. Farm Package
Despite President Trump's announcement of a $12 billion ad hoc payment to American growers, Canadian farm leaders have not launched a campaign calling for similar federal support. Instead, organizations like Grain Growers of Canada and the Agricultural Producers Association of Saskatchewan are focused on pressing the government to resolve tariff issues with China and negotiate better market access rather than seek direct payments.​

🥖 Record Spring Wheat Crop Continues to Depress Prices Despite Strong Quality
Canada harvested a record 29.3 MMT of spring wheat in 2025, up from 2024's 26.5 MMT and well above the five-year average of 24.2 MMT. Despite strong quality and steady export demand, the larger production has adjusted down earlier expectations for protein premiums, as sufficient supply from both Canada and the U.S. is available at current price levels.​
​​