IKAR in Mass Media

Where the margin is 2026
July 23-24, Moscow

IKAR in Mass Media

Deere forecasts weak annual profit on tariff hit

Deere & Co. forecast an annual profit below estimates on Nov. 26, pressured by tariff impacts and weaker margins from its large tractors, sending the farm-equipment maker’s shares down nearly five per cent.

CEO John May said ongoing margin pressures from tariffs would continue to weigh on its large farm equipment unit, although he expects to benefit from cost cuts and demand from two of its other units that serve forestry and small agriculture markets.

“We believe 2026 will mark the bottom of the large ag cycle,” May added.

As Reuters reported, lower crop prices and rising production costs have prompted farmers to defer big-ticket purchases and opt for rentals or pre-owned units for large agricultural equipment including tractors and combine harvesters.

Deere had also been considering production shifts, higher pricing and widening its portfolio of used equipment as it looked to offset the demand hit.

U.S. President Donald Trump’s sweeping tariffs have impacted companies across sectors, especially manufacturing and industrial firms that rely significantly on imported raw materials. In August, Deere said it expected a pre-tax tariff impact of nearly $600 million in 2025.

Deere expects its annual net income for fiscal 2026 to be between $4 billion and $4.75 billion, below analysts’ estimates of $5.33 billion, according to data compiled by LSEG.

The farm-equipment maker posted a quarterly net income of $1.06 billion, or $3.93 per share, for the quarter, down from $1.24 billion, or $4.55 per share, in the year-ago period.

Analysts on average had expected a quarterly profit of $3.85 per share.

Its fourth-quarter revenue rose 11 per cent to about $12.4 billion from a year ago, topping estimates of $9.85 billion.

Commentary

The quarterly report for John Deere provides a good snapshot of the current situation in agriculture across North America. The farm equipment manufacturers are usually the first suppliers to feel the downturn in the farm economy. That is because most equipment purchases are discretionary and can be put off until the next year. Leasing has complicated the picture in recent years, but the lack of demand will still impact equipment leases over the next few years.

Farm equipment manufacturers are slowing down production lines and closing factories to slow down production. This is an effort to reduce equipment inventory on dealer lots. The agriculture situation has gone from one of shortages and shipping delays of equipment to very slow demand.

Be very cautious about their guidance in anticipating that demand will bottom in 2026. John Deere’s guidance called for the bottom to occur in 2025 and a recovery in 2026. The current slump in the agriculture sector depends more on the global growing season weather over the next few years. Without a large weather-induced drop in production of corn, wheat or soybeans, prices will remain under pressure as supply outstrips demand.

This Week in Agriculture

Brazil’s 2025-26 soybean crop forecast at record 178 million tonnes

Brazil’s 2025-26 soybean crop is forecast to hit a record 178 million tonnes, despite some irregular weather that has delayed planting, Itau BBA analyst Francisco Queiroz said on Nov. 27 during an online event.

The forecast compares with the U.S. Department of Agriculture’s estimate of 175 million tonnes. The USDA projects about 171.5 million tonnes for Brazil’s 2024-25 soybean crop, Reuters reported.

Soybean acreage is expected to increase by about one million hectares (2.47 million acres) from the previous cycle, even as growers face tighter margins, Queiroz said.

The peak of the La Niña weather pattern between November and December caused irregular conditions that created some planting challenges, Queiroz added.

“But we have positive weather maps for the coming weeks in Brazil’s central region,” he said, pointing to a favourable outlook for yields in the main producing area, ensuring gains in output.

Late soybean planting could negatively affect Brazil’s second corn crop in key centre-west states, Queiroz said.

That said, Itau BBA’s Agro Consulting team still expects Brazil’s total corn output to reach about 138 million to 139 million tonnes, above the USDA’s estimate of 131 million tonnes.

Brazil produced 136 million tonnes of corn in 2024-25, according to the USDA.

Brazil’s corn crop forecast cut on rising drought risks

Brazil’s 2025-26 corn production is expected to reach 138.6 million tonnes, an LSEG Research & Insights report released on Nov. 26 showed, a one per cent cut from the previous forecast due to drought risks.

Southern corn-growing regions may face prolonged dry conditions through December, while Southeastern Brazil and Goias state are expected to receive showers over the next two weeks, the report showed.

Drought risks are increasing, especially in southern regions, LSEG Research & Insights said.

Brazilian farmers are sowing their first corn crop.

Southern regions have experienced dry conditions since early October and they may persist for the next two weeks and potentially through the end of December.

“Should this scenario occur, prolonged dryness could negatively impact yield potential,” it said.

In Brazil’s Southeast and Goias state, meanwhile, expected rainfall could expedite first-corn planting and benefit growth.

Nationwide first-corn planting reached 59.3 per cent as of Nov. 22, nearly matching 2024 levels at 58.7 per cent, according to national crop agency Conab.

Second-corn crops, which are planted later — after soybeans are harvested — and account for roughly 70 per cent of national output, face little risk according to current weather outlooks.

Their yields depend on soybean harvest progress and weather from March to July.

Editor’s Note

The two Reuters reports above seem almost to contrast each other, but they highlight the volatility of crop estimates with this early in the growing season. The soybean estimate is far more solid with planting nearly complete across the central and southern growing regions.

The corn estimate will be far more volatile as the southern crop is nearly planted, but the central growing areas will not plant until the soybean crop is harvested in February and March.

Bolivia’s bread shortage highlights subsidy reform challenge

Shortages of Bolivia’s state-subsidized marraqueta bread roll are creating an early test for newly elected President Rodrigo Paz, as dwindling wheat supplies and rising costs squeeze bakers and frustrate consumers.

The frustration from bakers and buyers highlights the political risks for Paz, who aims to unwind the subsidy-heavy economic model of his socialist predecessors without angering a population accustomed to state support, Reuters reported.

Bakers said delays in government-imported flour and other shortages make it difficult to meet demand for the iconic roll, whose price has been fixed for 17 years under the previous socialist government.

Bolivia imports about three-quarters of its wheat, mainly from Argentina.

Customers also complained that the marraqueta, which sells for the equivalent of eight U.S. cents, has shrunk to 60 grams (two ounces), down from 100 grams two years ago. Some shoppers queue for hours.

Baker Roberto Rengel added he had yet to receive promised ingredients from the state supplier for September. “The subsidy is killing us,” he said.

Some vendors have turned to pricier alternatives such as cheese-filled buns called sarnitas, which offer better margins. Others have stopped selling bread altogether.

State-run food agency EMAPA halted flour supplies in September because the government could not pay suppliers on time.

Paz, who took office on Nov. 8, has pledged to reform subsidies that cover energy, transport and basic goods but has so far avoided sweeping changes. Economy Minister Jose Gabriel Espinoza told Reuters the government was considering cutting some subsidies, such as for diesel, but he did not provide a timeframe or details for other key goods.

RDAR continues to become more relevant and useful to producers five years after its inception

Results Driven Agriculture Research has just passed its fifth anniversary of incorporation, and the group has accomplished a great deal in those five years.

“Our major success is continuing to build on generating sound income,” said Mark Redmond, Chief Executive Officer of RDAR.

“It’s not a single activity that we’ve engaged in, but rather the broad spectrum of results that we are continuing to put into the hands of producers.”

As Alexis Kienlen wrote for Alberta Farmer Express, producer engagement continues to grow, and Redmond said the profile of RDAR is growing within producer groups.

At this point, RDAR is reviewing more than 300 projects a year. In 2024, they funded 122 projects.

“We can’t understate the challenge for reviewing of all that work. We outperform most other research funding agencies in terms of those numbers, and the fact that we can quickly turn around on funding decisions,” he said.

Being producer-led means projects are immediately relevant to the farmers and ranchers of the province.

“In the past, research has been academically led, or government programs led at a very high level,” he said.

RDAR’s process involves engaging producers and the 30 member organizations (such as Alberta Beef Producers, Alberta Pork and the Alberta Pulse Growers) and discovering what is a priority to their membership. That brings immediate relevancy to the work done by RDAR, said Redmond.

“We can directly affect farm gate receipts and meet producers’ wishes for their operations,” he said.

Manitoba farmers uneasy on expropriation

A provincial highway project in the RM of Macdonald is putting new scrutiny on a system that critics say leaves municipalities on the sidelines and farmers navigating a process with little recourse.

The project in question would overhaul the junction of Provincial Trunk Highway 3 and Winnipeg’s South Perimeter Highway at the community of Oak Bluff. The province has plans for a new interchange replacing the busy intersection. In the process, expropriations will impact about 19 properties, four to five farm families and 100 acres of productive farmland, as Miranda Leybourne reported for the Manitoba Co-operator.

Brad Erb, reeve of the RM of Macdonald and a farmer himself in the Oak Bluff area, said the municipality has been reduced to a bystander role in decisions that will fundamentally reshape local agricultural operations.

There is further frustration on how the results of the expropriation will clash with operational realities facing farmers, and a feeling that consultations dismissed those concerns.

The expropriation will leave behind fragmented parcels that undermine farm efficiency, Erb said small fields that technically remain productive, but don’t align with modern equipment or economies of scale.

“This overpass is long overdue. That’s speaking as a farmer. The traffic and safety concerns in our community are horrible,” he said.

“I just want to make sure that those farmers who are affected are fairly compensated.”

Keystone Agricultural Producers said the situation underscores the need for a more rigorous framework that questions whether farmland removal is necessary in the first place.

“We want to protect farmland and make sure agriculture can remain an important part of the economy, and we want to minimize and actually have no farmland lost,” said Colin Hornby, KAP general manager. “The other part of this is wanting to make sure that we do have good, high-quality infrastructure so that we can move products to market.”.

Miscellany

Tyson Foods to close major beef plant

Tyson Foods announced on Nov. 21 it will close a major beef plant in Lexington, Nebraska in January, leaving approximately 3,200 employees out of work.

The move comes after U.S. cattle supplies fell to their lowest level in 75 years, Reuters reported. The company will also reduce operations at another beef plant in Amarillo, Texas, adding that operations will increase at other plants to meet consumer demand.

Dwindling cattle supplies have led to soaring beef prices. U.S. President Trump sought to bring relief in the supermarket by increasing beef imports from Argentina, removing tariffs from Brazil and asking the Justice Department to investigate meatpackers for collusion.

Agribition, CN Rail renew partnership

The Canadian Western Agribition and the Canadian National Railway announced on Nov. 25 a five-year extension in the latter’s involvement in the annual event held in Regina every November.

The announcement was made during the exhibition-opening Breakfast in the Barns presented by CN Rail, featuring an address from Saskatchewan Premier Scott Moe. The new five-year deal is worth $575,000, ensures the continuation of CN’s Free Admission Day and renews the railway’s commitment to support Agribition’s programming.

The event is expected to bring 1,200 international visitors from more than 60 countries.

Russian wheat export prices ease again, but analysts see further downside as limited

Russian wheat export prices slipped further during the week ending Nov. 21 amid high global supplies, but analysts said they do not expect this trend to intensify significantly.

The price for Russian wheat with 12.5 per cent (dmb) protein content for free-on-board delivery in late December to early January was $228 per tonne at the end of last week, down $1 on the week, said Dmitry Rylko, head of the IKAR consultancy.

However, the price is unlikely to fall far from these levels, he said, noting that Russia is unlikely to be willing to sell substantial volumes at even lower prices.

Agriculture Minister Oksana Lut said that a FOB wheat price of $230 per tonne was “balanced” and suggested that farmers should not expect a return to significantly higher levels, although fluctuations could not be ruled out.

The Sovecon consultancy estimated the price for Russian wheat with 12.5 per cent (dmb) protein content at $229 to $231 a tonne FOB compared to $232 to $233 a tonne FOB in the previous week, Reuters reported.

In its latest weekly report, Sovecon raised its estimate for wheat exports in November to 4.7 million tonnes, up by 0.1 million tonnes compared to the previous week’s estimate.

IKAR maintained its estimate of November exports at 5.2 million to 5.4 million tonnes.

Meatpacker JBS agrees to merge its leather assets with the ones from Viva

Brazilian meatpacker said on Nov. 25 it had signed a binding memorandum of understanding with the shareholders of Viva to combine both firms’ assets related to leather production and commercialization.

In a securities filing, JBS said the new company will be called JBS VIVA and will be owned 50 per cent by JBS and 50 per cent by Viva’s shareholders — Vanz Holding and Viposa.

The company will process more than 20 million leathers per year, with 31 factories and over 11,000 employees, JBS said, adding that the deal still lacks conditions including the signature of definitive agreements.

Trials work toward drone spraying approvals

In Canada, crop chemicals approved for use with a ground sprayer or crop duster can’t simply be stuck in a drone. They must be labeled with the term “remotely piloted aircraft system,” or “RPAS.” No agricultural chemicals have obtained that label yet, wrote Geralyn Wichers for the Western Producer.

It’s been a bone of contention between an industry that’s champing at the bit to access the technology and regulators who have said drone application has different considerations than standard aerial application and so needs a distinct label approval, even if those same products can be applied via spray plane.

The Pest Management Regulatory Agency says chemical makers must supply it with a raft of information, such as environmental data, operator exposure, spray drift and efficacy before those approvals can be considered.

Some in Canadian agriculture, meanwhile, are frustrated that the PMRA isn’t more open to taking data generated in trusted regulatory jurisdictions, such as the United States, to speed up the process.

Wet grain, Russian attacks on railways hit Ukrainian corn exports, union says

High grain moisture content and logistical woes caused by Russian attacks have slashed Ukraine’s corn exports from Black Sea ports in November and may do so again in December, farmers’ union UAC said on Nov. 25.

This year, harvesting was significantly delayed by rains in most regions, and the harvested corn was saturated and required additional drying. Ukraine expects to harvest at least 30 million tonnes of corn in 2025, Reuters reported.

UAC’s weekly report said Ukraine had exported 1.3 million tonnes of corn so far in November against 2.5 million tonnes in November 2024.

Traders say they plan to export 1.85 million tonnes of corn in December versus 2.6 million tonnes in the same month last year.

The union said that ongoing Russian attacks on Ukrainian railways, locomotives and power substations had led to a shortage of locomotives and significantly lengthened the time it takes to deliver corn to ports.

EU raises estimates of wheat and maize crops

The European Commission on Nov. 27 increased its estimate of 2025-26 usable production of soft wheat in the European Union to 134.2 million tonnes from the 133.4 million forecast last month.

In monthly supply and demand data, the Commission also raised its estimate of EU usable production of maize in 2025-26, to 57.6 million tonnes from 56.8 million expected last month.

As Reuters reported, it kept projected soft wheat exports this season at 31.0 million tonnes and maize imports at 18.8 million tonnes.

The rise in estimated soft wheat production led the Commission to raise its estimate for stocks at the end of the 2025-26 season on June 30 next year to 11.5 million tonnes, up from 10.8 million seen last month.

For barley, the Commission lowered its usable production estimate to 55.6 million tonnes, from 55.9 million last month.

In oilseeds, estimated rapeseed production is now seen at 20.2 million tons, up from 19.9 million estimated last month, while projected imports were unchanged at 5.5 million tonnes.

The sunflower seed output forecast was unchanged at 8.5 million tonnes.

Conagra considers selling its share in Ardent Mills

U.S. food processing firm Conagra Brands is open to selling its share of North America’s largest milling company.

Sean Connolly, Conagra’s chief executive officer, was asked during a Nov. 12 session at J.P. Morgan’s U.S. Opportunities Forum in Miami what his thoughts were on Ardent Mills.

“We’re open-minded in the future with that business, whether or not it remains part of us or not,” he said.

Dating back to the joint venture’s creation in 2014, Conagra and Cargill have each held 44 per cent of Ardent Mills, while U.S. co-operative CHS owns the remaining 12 per cent, as Sean Pratt wrote for the Western Producer.

Ardent Mills operates 30 wheat mills, a durum mill and a rye mill in the U.S., where it controls 28 per cent of the milling market.

Ardent has the capacity to mill 21,240 tonnes of flour per day in that market. Ardent’s biggest competitor is ADM Milling Co., with 11,725 tonnes of capacity, according to Milling & Baking News’ Grain and Milling Annual 2026 publication.

Ardent’s Canadian facilities include mills at Mississauga, Montreal and Saskatoon.

Klassen: Feedlots scale down cattle purchases

For the week ending Nov. 22, Western Canadian feeder cattle prices were steady to $10 per hundredweight lower on average.

Earlier that week, the heavier-weight categories came under pressure while cattle weighing below 700 pounds held value. However, by Nov. 21, all weight ranges exhibited a softer tone, as analyst Jerry Klassen wrote for the Glacier FarmMedia network.

Feedlots are coming to the realization that the fed cattle market may not recover. Current inventory on unhedged cattle is severely under water for winter and spring 2026. This is the main factor driving the feeder as the fed market continues to trend lower.

Alberta packers were buying fed cattle in southern Alberta in the range of $290-$292 per cwt. FOB feedlot. Breakeven fed cattle prices start around $305 per cwt. Margins are in negative territory.

In Alberta and Saskatchewan, cattle on feed inventories on Nov. 1 were up one per cent from last year. Cattle on feed 180 days or more were similar to year-ago levels, but weights appear be increasing. In the U.S., cattle on feed 180 days or more are up sharply from last year. There is a burdensome fed cattle supply in the U.S. in the short term.

India’s IPL receives offers for 1.56 million tonnes of urea

Indian Potash Ltd. (IPL) has received offers to supply 1.56 million tonnes of urea in its latest tender, as India moves to bolster nitrogenous fertilizer stocks for winter-sown crops amid rising demand, a senior company official told Reuters.

“The supplier response in the latest tender was really strong. We got offers from several companies for about 1.56 million tonnes of urea from different countries,” P.S. Gahlaut, managing director of IPL, told Reuters.

Companies have offered to supply the fertilizer from the United Arab Emirates, Oman, Saudi Arabia and Qatar, as well as from Russia and China.

The lowest offer to supply urea on the east coast was from trading firm Agrifields at $418.40 per tonne on a cost-and-freight basis, while the lowest offer for the west coast was $419.90 per tonne, he said.

IPL issued a tender earlier this month to secure 2.5 million tonnes of urea, with shipments required to depart from loading ports by Jan. 15.

Demand for urea and other fertilizers has been rising in India as farmers accelerate the planting of winter-sown crops such as wheat, rapeseed and chickpea.

South Korean flour mills buy estimated 131,300 tonnes milling wheat from the U.S. and Canada

A group of South Korean flour mills bought an estimated 131,300 tonnes of milling wheat to be sourced from the U.S. and Canada in an international tender on Nov. 26, European traders said.

This was above the 90,000 tonnes sought in the tender.

The purchase involved 91,300 tonnes sourced from the U.S. believed to have been sold by United Grain Corporation in two consignments.

Another 40,000 tonnes from Canada was said to have been sold by Bunge, they said. The purchase involves a range of different wheat types.

Malaysia palm oil exports to China down almost 29 per cent through October

The decline indicates deeper challenges relating not only to competitiveness and logistics, but also to pricing dynamics and market positioning, Johari Abdul Ghani said in his opening speech at an industry dialogue.

Malaysia’s palm oil exports to China totalled 1.39 million tonnes last year, down 5.3 per cent from a year earlier, Reuters reported.

Johari said the decline was attributable to higher prices for palm oil compared with soybean oil.

“As soybean oil is also imported as an edible oil for consumption and industrial use in China, buyers opted for the cheaper alternative…. This is not about geopolitics,” he said later at a press conference.

Palm oil tracks the price movements of rival edible oils, including soybean oil, as it competes for a share of the global vegetable oils market.

Johari suggested that China buyers should engage directly with major palm oil producers in Malaysia, noting that buyers who commit to one-year purchase agreements may be eligible for discounts.

Johari said he expects palm prices to remain above 4,000 ringgit per tonne by the end of the year and is optimistic about palm oil exports to China next year, adding that he believes the palm-soybean price spread would be normalised.

Cargill says it does not plan to close U.S. beef processing plants

Cargill Inc. has no immediate plans to close its U.S. beef processing plants, the company said on Nov. 26, days after meatpacker Tyson Foods announced it would shutter a major Nebraska facility as the industry grapples with tight cattle supplies.

Beef processors have been pressured as ranchers have slashed the U.S. cattle herd to its lowest level in decades following a years-long drought that burned up pasture lands and hiked feeding costs. A halt on U.S. imports of Mexican cattle tightened supplies further this year, as Washington seeks to keep out a flesh-eating parasite.

“We don’t have intention to close any primary beef processing plants right now,” Cargill said in an email to Reuters. “In fact, we are investing in them.”

Cargill, a major ground beef producer, has eight primary beef plants in North America that slaughter cattle, according to the company.

Cargill said in June it would invest about $90 million in its Fort Morgan, Colorado beef plant to improve automation and increase yields.

Weekly Markets

The Canadian dollar continued to weaken this past week with the daily rate closing at 70.90 U.S. cents. The U.S. dollar moved sideways this past week with the dollar index trading down slightly at 99.49 points.

ICE canola futures pushed higher this week with January contract up by C$1.30 per tonne. The cash canola market was followed the futures higher last week with values ranging from up by C$0.39 to C$1.20 per tonne depending on location.

Soybean futures dropped by four cents per bushel during the week. Soybean oil futures also trended lower with nearby contracts down by 0.92 cents per pound. Soymeal futures also dropped last week by US$5.80 per short ton.

Minneapolis wheat futures traded lower during the past week with the nearby contract dropping by seven cents per bushel. Winter wheat futures were also lower during the past week with the nearby Chicago wheat contract off by nine cents per bushel. Kansas City futures dropped by two cents per bushel. Spring wheat cash prices in Western Canada traded lower during the past week with values lower by between C$1.97 to C$2.92 per tonne.

Corn futures traded sideways during the past week but closed up by three cents per bushel. Oat futures also had a positive week and rallied by five cents per bushel. Cash oat prices in central Saskatchewan were unchanged over the past week.

Cattle futures were down by US$6.22 per hundredweight during the past week. Feeder cattle futures moved higher by US$1.73 per cwt. over the past seven days. Nearby hog futures traded higher during the week and posted small gains of US$1.40 per cwt. in the nearby contract.

Charts and tables