Sure, one way to read USDA’s World Agricultural Supply and Demand Estimates is to download the files from the government’s website and go through the line items one by one, looking for changes.
But deciphering the headline numbers from the Aug. 12 WASDE only required a quick glance at the price terminal when the data dropped at noon, ET. Nearby corn dropped nearly 8 cents a bushel on the get-go, while soybeans popped 20 cents. ‘Nuf said. Bearish report for corn, bullish for soybeans.
Sometimes the market’s first take on these reports fades quickly. But prices held on to that midday trend on the close, sending December corn to a loss of 13.25 cents, while November soybeans ended 22 cents higher on the session.
But growers shouldn’t pop champagne corks for soybeans, not just yet anyway. Nor should they be ready to dump what by all accounts is a mammoth corn crop of 16.7 billion bushels, or more. Post-report price movements didn’t change the math of the market.
The average prices USDA forecasts for the crops remain deep in the red, even accounting for normal rally potential given the government’s fundamentals of supply and demand. Average cash soybeans at $10.10 and corn at $3.90 won’t cut it—unless your cost accounting doesn’t provide for family living expenses or debt repayment and doles out minimum wage all around, including for owners and management.
So, how did USDA arrive at the numbers casting this pall?
Not unrealistic
The government mainly rearranged the deck chairs on corn’s Titanic, including what would be a truly big crop: 16.742 billion bushels, produced thanks to around 2 million more acres than previously forecast and yields of 188.8 bushels per acre from the first survey of farmers and their fields. The yield, if it stands, would be almost a full 10 BPA above last year’s crop.
But lest you think this is a fanciful figure, recall what I predicted last week: yields of 188.1 bpa, based on crop condition reports, to 189.2 bpa, based on satellite imagery of Vegetation Health Indexes.
I waffled on these seemingly fanciful yields—they seemed too high to be realistic to me—but USDA proved me wrong. Or, rather, right.
Big crops typically generate increased usage because grain is abundant—and cheap. Right on cue, the government jacked up its forecast for corn exports, feed usage and ethanol production. But even with a 4% demand bump, supplies left over at the end of the 2025-26 marketing year Aug. 21, 2026, would be 62% higher. And when these are converted to statistics of supply and demand, such as the number of days supply, the result is nearly as big: This metric would be 56% larger year-on-year. In other words, a lot.
So, what can we expect from the market now? My pricing model gives a nearby futures upside selling range of $4 to $4.20. July 2026 closed at $4.3125 on Tuesday.
Will China play soybean card?
Soybean’s balance sheet looks a little better, but not by enough to make much of a difference. USDA’s August WASDE yield of 53.6 bpa was somewhat lower than those forecast by crop progress and VHI methods, which I put last week at 54.7 to 55.2 bpa. But the USDA yield still would easily be a record. Lower year-on-year acreage would offset the huge yields, but a crop of nearly 4.3 billion bushels would present a challenge for demand. Crush would be strong, thanks to oil demand, but exports of whole beans would fall 9%.
Demand from China would return to levels from before the last year of trade war gridlock, but still not rise above totals from 2024-25.
With a $10.10 average cash price forecast for the crop by USDA, my models forecast potential for a nearby futures range top of $12.20 to $13.15. July 2026 settled at $10.65 on report day, so lots of heavy lifting loom to get anywhere near profitability.
Changing the forecast means changing the supply and demand fundamentals, which won’t be easy with trade friction and a potential recession looming that could affect demand. It could happen, but decide now, if you haven’t already, how much you can lose on these crops.