Baseball teams still alive in the playoffs should look to Washington for a fresh arm. USDA on Oct. 9 used a mean delivery to tame the grain market.
The latest World Agricultural Supply And Demand Estimates threw a curve ball at corn that sent futures down limit before bargain hunting kicked in. The agency’s updated Crop Production report raised corn yields 2.7 bushels per acre, adding 234 million bushels to the second-largest total in history. Usage fell 100 million short of the increase, increasing carryout to 1.849 billion and sending the average cash price down a dime to $4.70.
October estimates aren’t the end of the story — final numbers tend to go up about as often as they decline. Arguments can be made for both possibilities. The 181.2-bpa WASDE figure closely matched my forecasts from Crop Progress ratings during the Sept. 24 to Oct. 1 survey window used by the agency.
But conditions deteriorated in the week after the report data was collected, with both ratings and the Vegetation Health Index suggesting a drop to around 179 bpa. That possibility helped the market move off lows to settle at $4.7975, within a penny or two of the top end of the projected selling range from my models.
Only 23% of the crop was harvested as of Oct. 4, so a lot could change off the combine. Still, no correlation exists between the pace of harvest and seasonal lows.
USDA’s demand estimates look reasonable, at least for now. Feed and ethanol plant usage bumped up 50 million bushels each and exports added 25 million more due to slightly lower prices. With crops in Europe and Argentina fried by drought, additional losses could boost near-record sales overseas even more, while overall demand likely depends on what happens in energy and financial markets.
A big collapse in crude oil could boost biofuels if lower gasoline prices encourage drivers to top off their tanks. The opposite could also be true if lower fuel prices stem from demand crushed by a weak economy that topples Wall Street. All to say, crude at $50 or $200 a barrel could be a game-changer.
China buying falling short
Soybeans retreated to a new fall low in sympathy with corn before reversing to close at $12.92, just a nickel or so from my forecast price based on fundamentals of supply and demand. The WASDE changed little in the bean balance sheet bottom line. Carryout rose 5 million bushels after USDA raised production 27 million bushels to 4.562 billion bushels. Yields went up three-tenths of a bushel to 53.1 bpa, in line with crop ratings and VHI projections, while a small increase in exports and residual use held carryout to 315 million bushels.
USDA made no changes to its estimates of Chinese production or imports, keeping supplies from Argentina and Brazil unchanged. Planting is just underway in Brazil, where seeding is slightly behind last year but a little better than average. A third of Argentina’s fields are short water but could benefit from strong El Niño warming of the equatorial Pacific.
As usual, China remains the swing factor for prices. USDA forecast a 1.8% increase in Chinese soybean imports for the 2026-27 marketing year, which would boost purchases by 1.8%. Trouble is, the total for the 2025 crop recorded by China Customs was 18.4 million bushels short of USDA’s estimate, suggesting some daylight between the two projections. That difference isn’t huge but could throw a wrench into rally hopes.
So, what’s the take-away from the WASDE? Based on the new data, both corn and soybeans seem rationally priced. That provides cover for growers needing to make sales, while leaving room for both rallies and more selling into 2027.
