Thursday, October 9, 2025

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BMO: “Russian Grain Will Likely Flow.. At What Discounts Remain To Be Seen”

Last week BMO Capital Markets hosted a fireside call with a number of U.S Midwest-based agriculture commercial lenders. This comes after companies scramble to find inputs as fertilizer purchases are now being rationed due to fears around Russian sanctions.

The first point within the BMO note on the topic is that though grower sentiment remains strong, some people are concerned that crop prices have gotten away from the market. This as a result may possibly lead to a negative impact on demand in 2023. BMO says that they would be more comfortable if corn futures would drop from $6.50/bu to $5.50/bu as a result.

To add to the concerns, BMO says that the commercial lenders are starting to have concerns about the sector heading into an under-supply scenario. This is based on severe drought impacting the US, with up to 70% of winter wheat impacted, as well as issues in Ukraine and Brazil that further impact supply. Though they believe that Russian grain will “likely flow, but under what conditions and discounts remain to be seen, and it won’t likely be without considerable risks on logistics, supply, etc.”

BMO notes that lenders are surprised that roughly 25% of new crop sales are this year’s crop. Though this is in the normal range, they are surprised considering “how elevated new crop prices are.” Lenders have also mentioned that the fertilizer availability seems to not have been affected, though “phosphate inventories deemed low in the retail channel and growers are seen cutting potash and phosphate applications/purchases as much as possible.”


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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