Markets listened – did you?
I warned readers to beware of big price moves from the Aug. 12 World Agricultural Supply and Demand Estimates — and USDA’s forecasts didn’t disappoint, at least on that metric. Lower than expected 2026 yields reported by the agency’s first surveys of farmers and their fields helped November soybean futures add more than 1%, while December corn jumped 4.5% higher.
Unfortunately, WASDE raised more questions than answers. Among the “known unknowns:”
- Will gains last?
- What could happen to yields as harvest reveals the real size of these crops?
- Is it time to price inventory and move on to 2027?
But first things first. What did the Aug. 12 data dump say?
Corn. The government pegged corn production at 16.013 billion bushels, just 13 million above its previous estimate, thanks in part to a modest increase in acreage that offset average U.S. yields of 180.7 bushels per acre, 2.7 bpa less than the 183 bpa predicted as statistically “normal.” This cut projected supplies leftover Aug. 31, 2027, the end of the marketing year, to 1.653 billion. While that would be 137 million lower compared to the July estimate, it added only a dime to the projected average cash price, which increased to $4.50.
Total 2026 crop demand rose only 75 million, muting some of the report’s impact. Exports were the only segment of usage with an increase, which USDA chalked up to higher demand globally and Ukraine’s export challenges.
Soybeans. USDA put initial soybean yields at 52.7 bpa, only three-tenths of a bushel below normal, and production actually rose 44 million bushels due to higher acreage. Higher expected crush bumped up usage, limiting the increase in projected carryout to a mere 10 million bushels, with no change in the $11.40 average cash price for the crop.
Global competition. A steady drumbeat of sales to China set the market’s cadence, with no change noted in South American production.
Market hangs on
Both corn and soybeans mostly hung onto gains through the end of the week. Whether that positive tone continues depends in part on what happens with USDA’s yield estimates, which won’t be finalized for months.
Corn faces more headwinds in similar years than soybeans — corn yields are 70% more likely to improve than soybeans, based on years when August estimates were below normal.
Weather and politics look likely to dominate both markets for now. Weekly ratings from Crop Progress reports begin to trend lower for corn into September on average and also lose some of their predictive power. The accuracy of soybean ratings, by contrast, improves.
Corn usage for ethanol could be a wild card for feed grains, as higher gasoline costs begin to crimp consumption and blending. Biofuels also factor into soybean demand, impacting crush, while traders track export volumes. China imported 10.5% more soybeans in June than the year before. Its take for the entire crop year is up 4.5% while USDA continues to show no improvement on its balance sheet. But the better outlook could be tested as the U.S. considers whether to sanction China’s oil imports from Iran ahead of the summit between Presidents Trump and Xi set for September.
How’s your stomach?
What about sales?
- December corn stayed in the middle of my projected selling range of $4.60 to $5, keeping sales attractive for growers who can’t stomach a downturn.
- November soybeans lingered below the bottom end of their target at $12.60-$13.60. A move into that territory may come quickly and evaporate just as fast, suggesting it’s prudent to keep chipping away on sales during rallies to whittle exposure to a level your business can handle in case China backs away from the table, like Lucy pulling the football away from Charlie Brown.