Weather is the obvious culprit for volatility in the grain market around Independence Day — if conditions threaten corn pollination or the outlook for soybean success. Still, in some years impacts from heat and drought are a dud, but prices rocket higher anyway.
The cause for unexpected price swings: Overlooked updates to acreage and grain stocks reports USDA publishes at the end of June. (For 2026, that’s tomorrow.) Changes in these reports may seem relatively minor or too deep in the weeds to matter. But impacts can be significant, especially when traders are caught leaning the wrong way.
Just two years ago the government reported June 1 corn and soybean inventories were up 22% from the previous year, sending cash corn prices down 40 cents over the next week, while soybeans tumbled $1.13. But in 2014 soybean stocks were down 7% as farmers sold aggressively. Cash soybeans jumped $1.52 over the following week, enough to pull corn higher too, with strong corn demand offsetting larger stocks.
Corn stocks surprise
The most recent World Agricultural Supply and Demand Estimates released June 12 forecast corn stocks at the end of August 2026 would be around 38% higher than the previous marketing year. My models suggest a much smaller increase, which could set up futures for a rebound.
Connections between price moves for corn and soybeans, as well as reactions the day and week after these reports, aren’t perfect by any means. But they are strong enough to be statistically significant — that is, not the result of mere chance. And changes tend to be in the same direction. So, if corn is higher a week after the report, so are soybeans, and vice versa.
One question reports could answer this year is how fast growers can pivot, shifting fields at the last minute to capture a better advantage. A “peace dividend” from the Middle East war with Iran should ramp up the uncertainty. Will fuel and fertilizer expenses fall fast enough to make a difference? How much could demand improve if Iran uses unfrozen funds to purchase U.S. originations?
Soybeans lose less
Soybeans seem to own the upper hand currently, though both crops could lose money when all costs are included. USDA data appears to give the oilseed an advantage over corn by around $45 an acre, likely enough to swing a few acres away from feed grains. But any forecast is hardly fixed in stone. Both corn and soybeans were planted so far this year in a timely fashion, which could limit flex acres anyway.
Weather data, meanwhile, is mixed. The percentage of both crops rated good or excellent is moderately above normal, despite Vegetation Health Indexes that are weaker than average. This disparity alone ratchets up uncertainty.
Financial markets only add another layer of influence. Investors are split about inflation, fearing higher interest rates because the price metric followed most closely by the Federal Reserve continues to run above the central bank’s target of 2%, hitting an 18-month high in May. But consumer sentiment remains weak and signs of higher wages are scarce ahead of July 2 jobs data, which could help the Fed stay on hold.
Prices could change not only with weather, but also with demand. Damage to corn in Europe from extreme heat could boost imports while Chinese intentions for soybean purchases are murky at best. U.S. relations with Beijing appear to be stabilizing, but the economy of the Asian power continues to sputter.
All these moving parts make rallies possible, but far from long-lasting. Use strength to finish pricing of 2025 crop inventory and to set a price floor for 2026.
