PRAIRIE ROUTES
NEWS

Good morning, a persistent Arctic high pressure will bring an extended cold snap to the Canadian prairies this week, with daytime highs mostly in the –15°C to –25°C range and overnight lows dipping to –30°C to –36°C, especially in Saskatchewan and Manitoba. Light winds and clear skies will exacerbate wind chills to near –40°C in spots, while scattered flurries add minimal accumulation. Prepare livestock for stress from the bitter cold and limited travel opportunities through early February.

MARKET PULSE

Commodity Market Update

Commodity Market Update

Mar & Apr futures brief for today

Natural gas surged to three-year highs on Arctic cold from Winter Storm Fern, but grain markets retreated on profit-taking. Livestock held near highs despite volatility. China tariff relief reshapes 2026-27 planting intentions as AAFC releases first crop projections.

Corn (Mar '26): $4.265/bu (down 1.75 cents overnight). March corn down 5.5 cents overnight from Jan 27 session. Trades at 7-9th percentile 5-year range. USDA export sales: 110k MT corn + 306k MT sorghum to unknown destinations overnight. Canadian basis $1.35–$2.26 over March (old-crop), $1.05–$1.45 over Dec 2026 (new-crop).

Soybeans (Mar '26): $10.89/bu (+13.25 cents overnight, up significantly on China demand follow-through). China purchases (204k MT week of Jan 15) validating new tariff regime. AAFC expects 2026-27 soybean area up to 5.933 million acres (from 5.782 million), yield rebound to 47.1 bpa from 43.6 bpa (drought recovery). Old-crop basis $3.10–$3.55 over; new-crop $2.91–$3.11 over Nov 2026.

Wheat (Mar '26): $5.32/bu (+13.5 cents overnight, Kansas City wheat +12.75 cents). Minneapolis spring wheat $5.77 (Sept contract $6.04). AAFC expects durum down 450k acres to 6.081 million acres; spring wheat up to offset. All-wheat yield to drop to 48.5 bpa (vs. unusual 55.9 bpa in 2025).

Live Cattle (Apr '26): $236.825/cwt (down $0.58 overnight after Monday gains). Feb live $235.75, down 0.12%. Choice boxed beef held at $357+ (retail demand strong). Screwworm blockade on Mexico imports continues tightening supply.

Feeder Cattle (Mar '26): $361.425/cwt (down $0.58 overnight). April feeders $362.925 after gains last week. CME Feeder Index premium $5.88.

Lean Hogs (Apr '26): $95.725/cwt (down $1.10 overnight after Feb weakness of 0.5 cents). Feb hogs down slightly but April/June/July setting contract highs. Pork cutout $97.26/cwt, up $1.51. CME Hog Index $83.62 (Jan 22). USDA slaughter 426k head Monday, down 5,345 head year-over-year.

Natural Gas (Feb '26): $6.954/MMBtu (surged on Winter Storm Fern Arctic cold). Feb contract closed $6.054, down 13% from intraday highs. March $3.820/bu (down 0.078 cents overnight). EIA storage withdrawal expected 230 BCF for week ended Jan 23 vs. 321 BCF last year. Arctic cold forecast lingering through week.

Not financial advice.
Data sources: CME, USDA, Barchart.com, DTN, Sprague Energy, GFO

TRENDS

📈 The Bulls and 📉 The Bears

📈 Bullish:

• Manitoba Invests $25,000 in Farm Equipment Interoperability; Digital Agriculture Gets $990K Support - The Manitoba government pledged an additional $25,000 on January 22 to the Prairie Agricultural Machinery Institute (PAMI) to support work aimed at making farm machinery and digital systems work together despite coming from different manufacturers. The investment brings Manitoba's total support for PAMI's digital agriculture and engineering projects to $990,000. Karen Fatteicher, co-owner of 360 Ag Consulting, noted the investment is "helpful, but very, very large undertaking" as farmers currently face closed systems from equipment manufacturers that prevent data sharing across brands. ​

• Canada-Manitoba Announce Lower AgriInsurance Premiums + New Sustainability Rewards Program for 2026 - Governments of Canada and Manitoba launched a pilot sustainability rewards program on January 21 that offers farmers lower AgriInsurance premiums for adopting sustainable management practices. Average premiums for annual crops are now $11.46/acre in 2026 vs. $13.01/acre in 2025, a 12% reduction. Total coverage expanding to $4.3 billion for 2026. New wildlife damage coverage additions include blackbirds, raccoons, vultures, eagles, and hawks. ​

• Drone + AI Technology Showcased at 49th Manitoba Ag Days; Last-Mile Field Operations Transform - Manitoba Ag Days (Jan 20-22) featured new drones equipped with AI technology for field navigation and data collection, with minimal soil compaction and superior performance in wet seasons. Manufacturers report prosperous sales despite trade uncertainty, signaling producer confidence in technology ROI. ​

📉 Bearish:

• AAFC Closes Seven Research Facilities Including Two Saskatchewan Sites; 100-Year+ Breeding Legacy Lost - Agriculture and Agri-Food Canada announced January 24 closure of seven federal research farms and centers, including research facilities in Saskatchewan (Indian Head, which produced 25% of Canada's seed varieties) and Lacombe, Alberta. Facilities established as early as 1887 will shutter despite history of "breakthrough discoveries in sustainable beef production, crop sustainability, food safety and nutrition". SaskOrganics noted the Swift Current organic research program's long-term field trials addressing grasshopper control and beneficial insect deployment are ending. Keith Currie, Canadian Federation of Agriculture president, warned: "You look at facilities like Indian Head, where probably up to 25 per cent of our seed varieties and production have come out of that facility". ​

• Global Agricultural Commodity Market Faces "Unprecedented" Trade Disruption; Tariffs Volatile 2026 Pricing - Global agricultural commodity markets are navigating "unprecedented" structural shifts in trade policy, climate volatility, and geopolitical rebalancing, with tariffs and sanctions causing dramatic shifts in grain, oilseed, and pulse commodity flows. Countries prioritizing domestic food security over global trade fluidity are implementing export bans, buffer stockpiling, and renegotiating long-term contracts. Rerouting of shipments due to sanctions and freight instability has increased market reliance on alternative suppliers, causing volatile benchmark pricing and disrupting futures market predictability.

• CUSMA 2026 Joint Review Puts Canadian Agriculture on Edge; 98 Ag Groups Demand Status Quo - Ninety-eight Canadian food and agricultural organizations signed a letter demanding the Canadian government keep the Canada-U.S.-Mexico Agreement (CUSMA) unchanged during the 2026 Joint Review process. Provinces showed 42% agricultural support for CUSMA status quo vs. only 18% automotive support, yet uncertainty remains as Trump administration signals willingness to renegotiate. U.S. agricultural groups similarly signed a letter to Congress requesting CUSMA stability. ​

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INCASE YOU MISSED IT

Quick Hits on Policy and Relevant News

💰 FARM CREDIT CANADA WARNS: 2026 CROP WILL BE "MOST EXPENSIVE EVER PUT IN GROUND"- COSTS UP 4%
Farm Credit Canada's chief economist Desmond Sobool declared 2026 will see farmers face the "most expensive crop ever put in the ground," with overall farm expenses rising 4% year-over-year. Since 2019 base year, farm expenses have climbed 50% while Canadian inflation only rose 20%, revealing massive agricultural-specific cost pressures. Sobool cited energy, fertilizer, machinery, and labor costs as primary drivers.

💼 CANOLA COUNCIL, CCGA WELCOME CHINA TARIFF DEAL BUT NOTE CANOLA OIL, PORK PRODUCTS STILL FACE HIGH RATES
Canola Council of Canada and Canadian Canola Growers Association welcomed January 26 announcement of China tariff relief but highlighted key gaps: canola oil continues to face 100% tariff, and pork products subject to 25% levy. CCGA president Rick White noted the deal comes "at a critical time" with much 2025 crop still on farm and 2026 planting months away. APAS president Bill Prybylski called the agreement "an important breakthrough after years of export barriers".

⚠️ TRUMP THREATENS 100% TARIFFS ON CANADA OVER CHINA DEAL; U.S. CANOLA MARKET WORTH $7.7B AT RISK
U.S. President Donald Trump threatened to impose 100% tariffs on Canadian goods if Canada proceeds with trade agreements with China, directly threatening Canada's $7.7 billion annual canola exports to the U.S. (oil, meal, seed combined). Farm Credit Canada economists warned the threat complicates 2026 trade planning despite the recent China-Canada deal. CUSMA clarity remains uncertain despite agricultural commodities falling under tariff-free categories.

🎯 AAFC RELEASES 2026-27 CROP PROJECTIONS: CANOLA UP 2.4%, BARLEY UP 6.1%, DURUM DOWN 6.9%
Agriculture and Agri-Food Canada released January 21 its first official outlook for 2026-27 seeded intentions. Canola area projected at 22.029 million acres (+2.4%), boosted by China tariff confidence. Barley area expected to jump to 6.511 million acres (+6.1%) despite yield normalization to 65.2 bpa from exceptional 79.4 bpa in 2025. Durum wheat area to decline 6.9% to 6.081 million acres as farmers shift to spring wheat. Soybean area up 2.1% to 5.933 million acres with yield recovery to 47.1 bpa from 43.6 bpa.