A skeptical trade with data of its own may not blink today when USDA releases its much-delayed crop production report and World Agricultural Supply and Demand Estimates.
Economists and traders essentially have two questions about the reports:
- How is USDA arriving at the numbers since the federal government has been shutdown since Oct. 1? The few ongoing reports not dependent on federal funding aren’t enough to fuel full crop production and WASDE reports.
- Will today’s reports be educated guesses derived from September data, which was gathered in the early days of the 2025 corn and soybean harvest?
Large firms gather their own data and those estimates likely are already built into the market, which often is the case even when the federal government is up and running.
StoneX Chief Commodities Economist Arlan Suderman offered a glimpse into that world in July. And he took a lot of heat for it when the StoneX estimates aligned almost perfectly with USDA numbers that shocked the market that same month.
His viewpoint, however, is, well, on the money: Major funds have their own highly credible yield models.
“They've built them. They've spent money on them,” Suderman says. “When you have billions of dollars at stake, you don't mind spending money to build a yield model based on weather factors, growing conditions, satellite data, etc., projecting yields.”
And they trust those numbers enough to act on them.
What about exports?
The third variable, particularly impactful for soybeans, is whether exports hinge on production estimates or on the Supreme Court’s ruling on whether President Trump’s tariffs were enacted legally. And those exports are what can have the greatest impact on prices.
“I think the Chinese are waiting to see what happens (after the Supreme Court rules). That's just my opinion,” North Dakota State University Extension economist Frayne Olson says.
Supply must shrink
Ultimately, the U.S. simply has to sell its grain, Olson says. Until supplies of corn and soybeans shrink, prices aren’t moving much.
Regardless of political grandstanding on either side of the world, soybean sales to China may never be what they once were – trade war or not.
Compeer agricultural economist Megan Roberts sees other factors – ones in play long before Oct. 1 – impacting commodity prices. For soybeans, that’s a recession and aging population in China coupled with a defacto embargo on the U.S.
Jason Henderson, vice president, Iowa State University Extension and Outreach, agrees: China’s “whole challenge for the last two decades is they needed to get rich before they got old. I think they're struggling with getting old before they got rich.”
Traders know that. They see piles of golden grain on the drone photos. They know even a slight downturn in yield still leaves at least near-record corn production. On the soybean side, nobody has seen a signed trade deal. They instinctively don’t trust China and they may trust USDA’s numbers even less.
Be ready for a swift kick
So, unless USDA magically makes supply either grow or disappear today, don’t expect any major market moves simply on today’s reports. Remember the two questions? Well, this theory has two caveats:
- A stunning increase, such as the 2 million acres of corn added to the August crop report. Given USDA showing an unexpected jump in supply in this week’s Class III milk report, we can’t rule out another such surprise in today’s reports. Who knows which crop might take such a blow?
- On the other side, a sudden drop in supply also could drive a knee-jerk reaction. In that case, be prepared to move quickly. Any rally isn’t likely to last.
We don’t know what numbers USDA might spit out. We don’t know where Trump might aim a social media post. And it could be the dark is deeper after today than it was when the lights went out in Washington.