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I have often said that the drought ends when it rains. That's exactly what happened this past week on my farm where I received approximately 2.5 inches of rain within a five-day period. Almost instantly you could see the effect on the corn and soybeans. Everything looks and feels better, including the psyche of all the farmers in the area.

My crops were marching backwards for about five or six days so it's a little bit difficult now to estimate if and how much damage there is. Interestingly enough, the rain that came to southwestern Ontario was the same rain and lower temperatures that caused a bit of a swoon in our agricultural commodity prices. Still, prices are higher than they were a year ago. As we go through the rest of August, we will see if soybeans continue to lie to us. Will the recent rains help set those pods with an extra bean bringing in bigger yields this fall? It is all part of the mix now.

There are still dry areas of the U.S. Corn Belt, but it's pretty clear we are headed toward a big crop. Keep in mind that the USDA is still estimating U.S. corn to come in at 16 million bushels (mb) based on the yield of 183 bushels per acre (bpa) and planted acreage of 95.3 million acres. This will still be the second largest crop on record.

On the soybean side of the equation, the USDA predicts the largest soybean crop ever in the U.S. We are looking at a crop of 4.457 billion bushels (bb) on a trend line yielded 53 bpa. We will look at the next USDA report to see whether any of this changes.

What that tells us, especially today, is a big crop is almost here, and we should expect prices to decline going into fall. However, what we found out about 2026 is it's a much different grain market than years before. The war in Iran, as well as in Russia and Ukraine, have created a jittery nature for prices which won't settle down.

We also have Truth Social media post mixed in with AI producing financial news headlines triggering trading algorithms. This spills over into predictive markets, and we have a totally new grain-trading field.

The latter is a lot of noise, but increasingly it seems that noise is having a big effect on where the price of grain wants to go.

You can also make that argument for the price of oil. So, forgive me for a minute when I bring up something that I thought earlier might have a big effect on our Ontario and Quebec cash prices for grain. No, that's not the Canadian dollar, even though it has a big effect. Earlier this summer, we started seeing headlines about the drought in western Europe. It became increasingly obvious to me that there might be some grain export opportunities into Europe for Ontario agricultural commodities, such as corn and soybeans, simply because the Europeans would be in much greater need because of dry weather.

The first thing that we need is for Ontario and Quebec to produce a big corn crop. At this stage of the year, it looks like it's going to be much better than a year ago when eastern Ontario corn burned up in the field. With Ontario producing 2.32 million acres of corn with an average yield of 190 bpa, you are looking at about 440 mb of corn produced this year. When you combine this with the Quebec corn, there certainly could be room for 100 mb of eastern Canadian corn exported to Europe in 2027. At the very least, this should increase corn basis levels significantly in eastern Ontario, as well as Quebec, in the coming months.

Keep in mind that any Ontario and Quebec exports of corn into Europe means that we are in direct competition with cheap corn on the high seas, whether that be from Brazil, the U.S. or Ukraine. Keep in mind that "cheap" is a great elixir in grain movement. However, there may be problems in some of these other areas and maybe will give us an opportunity to garner higher returns in the future.

But keep in mind the President Donald Trump called Canadians nasty last week. We are only one Truth Social media post away from everything in the commodity market being flipped on its head. That's the environment we're in and will likely continue to be.

So, as we head into mid and late August, it's time to hone those marketing plans even more. The drought did end when the rain came, but it didn't come for everybody. We must remember risk management never gets old. The challenge through August will be to separate the noise from the opportunities. There will be plenty of headlines, social media posts and geopolitical surprises competing for our attention. However, somewhere beneath all of that are the market fundamentals that still matter.

As always, the market won't send us an invitation. It will simply open a window for a short time, and our job as farmers will be to recognize it before it closes.

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The views expressed are those of the individual author and not necessarily those of DTN, its management or employees.

Philip Shaw can be reached at philip@philipshaw.ca

Follow him on social platform X @Agridome

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