Wheat futures have pushed higher in recent weeks, but a growing disconnect between futures prices and cash markets points to a potential correction ahead. Meanwhile, barley exports are running at multi-year highs on strong global demand, and the longer-term supply outlook for several grains is tightening.

Wheat: futures rally runs ahead of cash markets

MGE hard red spring wheat futures gained $0.09/bu on the week, with Kansas City adding $0.14/bu. However, there are signs that US futures values may be getting ahead of the underlying fundamentals.

Hard red spring wheat basis levels have pulled back sharply in both western Canada and North Dakota, sitting near the low end of the three-year range and at levels typically only seen during harvest. At the same time, Euronext milling wheat futures have lost ground relative to Kansas City and Chicago, reaching their weakest comparative level in two years, reducing US competitiveness in global export markets.

Commercial stocks of non-durum wheat in Canada stood at 2.82 million tonnes in week 32, near the high of the year, with elevator stocks reaching a new seasonal high of 1.65 million tonnes. Export volumes have slowed over the past six weeks, and whether this is a longer-term trend remains to be seen.

The IGC projects global wheat production in 2026/27 at 822 million tonnes, down from last year’s record but still the second largest on record. Total usage is expected to increase, which would reduce world carryout, though it would remain at a comfortable level. Analysts note the production drop may ultimately prove larger than currently projected, given last year’s unusually favorable growing conditions across most key regions.

Looking ahead to the 2026 Canadian crop, spring wheat acres are forecast at 18.8 million, essentially flat year-on-year. A return to more normal yields could see non-durum production fall by 2.7 million tonnes to 30.1 million tonnes, with total non-durum supply in 2026/27 projected at 35.1 million tonnes, down 2.1 million and the lowest in three years.

The bottom line: futures remain firm, but basis levels and cross-market comparisons suggest US values may have overshot. A correction is possible, though momentum and broader money flow, tied in part to sentiment around the conflict in Iran, could push prices higher in the near term. Cash bids may show only a muted response to any pullback, given already soft basis levels and seasonal tendencies for bids to firm into spring.

Durum: exports running ahead of last year’s strong pace

Canadian durum exports have pulled ahead of 2024/25’s exceptional pace, reaching 185,800 tonnes in week 31, the highest weekly total since mid-January. The full-year export forecast has been nudged up slightly to 5.5 million tonnes, with 2025/26 ending stocks projected at 1.43 million tonnes, the highest since 2018/19.

North African crop conditions add a notable supply-side development. The EU’s MARS remote-sensing group reports rainfall has been average to above average across key durum-producing regions, with Morocco far above average. MARS is calling for above-average to well-above-average yields in Morocco, Algeria and Tunisia. Regional durum production could reach 5.6 million tonnes in 2026, approximately 20% more than 2025, which would reduce import requirements from Canada and other origins.

Canadian durum bids have been steady to slightly firmer since last fall, which runs counter to the usual seasonal tendency for prices to decline through winter and spring. The bottom line: sideways is the most likely near-term price direction, with strong Canadian export volumes providing support while large supplies and expectations of a bigger North African crop limit the upside.

Barley: strong export demand from multiple regions

Canadian barley exports are running well ahead of the five-year average, with year-to-date volumes through week 31 at 2.14 million tonnes, some 400,000 tonnes above the five-year average. The full-year export forecast of 3.2 million tonnes is considered within reach.

EU barley exports are also running at their strongest pace in over 10 years, with 6.84 million tonnes exported through week 37, some 45% more than last year. Saudi Arabia is the largest destination, followed by China and other Middle East markets.

Chinese domestic barley prices turned sharply higher this week, following earlier gains in corn and wheat, which could strengthen demand for imported barley further. This comes alongside deteriorating moisture conditions in southern and central Alberta and southwest Saskatchewan, key barley-growing regions, which could threaten the 2026 crop if conditions do not improve.

Feed barley bids in western Canada moved higher on the week, while malt bids showed no change, reflecting quiet demand in the malt segment both domestically and globally. Seasonal gains in feed barley bids are expected to continue.

Corn: momentum-driven gains, fundamentals less clear-cut

Corn futures gained $0.07/bu on the week, pushing the May contract to its strongest close since June. USDA reported weekly export shipments of 1.75 million tonnes, with year-to-date totals of 43.5 million tonnes, well ahead of last year’s 31.4 million tonnes.

The IGC projects 2026/27 world corn production at 1.30 billion tonnes, modestly below the current season’s 1.32 billion tonnes, though still the second-largest crop on record. Total usage is expected to reach a new record and exceed production, pointing to a modest tightening of stocks. Fertilizer price increases are flagged as a potential risk to production, particularly outside North America.

The latest Commitments of Traders report showed managed money holding a net long position in corn of 198,804 contracts, with a weekly build of nearly 150,000 contracts, an unusually large move. While there is some fundamental justification for firmer prices, money flow has been a significant driver.

The bottom line: there is fundamental support for firming corn prices, particularly if fertilizer costs weigh on production. However, near-term supplies are not tight, and the market may be overextending without early-season weather threats to justify current levels. The March 31 USDA stocks and acreage reports will be closely watched.

Oats: cash bids lag as fundamentals remain soft

Oat futures slipped $0.06/bu on the week, though the May contract continues to trade near recent highs. Cash bids in western Canada and North Dakota have not followed futures higher, reflecting the disconnect between speculative buying and the underlying fundamentals.

Domestic milling volumes continue to lag, with cumulative oats milled at 425,000 tonnes through week 32, some 53,500 tonnes below last year and nearly 30,000 tonnes below the five-year average. US oat imports through January are at a historically low 820,240 tonnes for the season. Terminal stocks in Canada stand at 82,300 tonnes, well above last year and the five-year average.

The bottom line: cash bids are a better reflection of the underlying fundamentals, which remain sluggish. Any price increase is expected to be modest without a pickup in demand. A tighter balance sheet in 2026/27 is supportive in the longer term.

Rye: large carryout limits upside

January rye exports came in at 7,489 tonnes, the lowest total for the month since 2021/22. The 2025/26 full-year export forecast has been revised down to 170,000 tonnes from 185,000 tonnes, adding further to an already large carryout. Prairie rye bids remain essentially flat.


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