Monthly crop reports are the USDA version of reality TV, but the “big reveal” from Sept. 11 updates was mostly a nothing-burger — think burned-out torches and wilted bouquets.
A lower-yield estimate briefly roiled corn before proving “dudly.” December corn traded a 20-cent range after the government cut production more than 200 million bushels, ultimately closing lower and leaving a bearish reversal on charts.
USDA put the average nationwide corn yield at 178.5 bushels per acre, 2.2 bpa lower than its first survey of farmers and their fields reported Aug. 11. The new estimate wasn’t a surprise: It matched my model’s prediction from Vegetation Health Index maps produced by satellites.
The soybean yield unveiled by the government was even less of a shock: The national yield of 52.8 bpa changed only one-tenth of a bushel and also matched VHI trends. Still, November futures ended 35.75 cents lower after briefly flirting with gains.
These results were a recipe for volatility. So, where does that leave growers and their risk management plans? With plenty to consider.
Futures hit targets
December corn peaked Sept. 11 at just under $5.45, closing at $5.32, outlining the top third of my projected nearby selling range of $4.98 to $5.33. I plugged in a yield of 175.6 bpa, cutting nearly 275 million more bushels off production, and assumed rationing would trim demand by 640 million, keeping projected ending stocks on Aug. 31, 2027, around 1.6 billion bushels. USDA raised its average cash price forecast for the crop by 30 cents to $4.80, but my model saw less of a bounce.
Demand will take time to be proven, and production also could change, with yields ranging from 173 to 190 bpa not out of the question.
Soybeans likely have even more room for moves in the months ahead. November futures peaked at $13.3525, a few pennies shy of the top of the selling range top of my model, which pegged stocks left over at the end of the marketing year around 40 million bushels more than USDA forecast.
This outlook assumes production is lower than the government forecast, with rationing limited to crush due to the uncertain outlook for energy market and biodiesel. This, of course, ignores the 500-pound elephant in the room: China, which as usual holds the scales to demand balance
The latest Export Sales report showed China well on the way to meeting commitments under its trade deal with the U.S., with sales on the books matching 40% of totals from the just-completed 2025-26 marketing year. China’s total purchases are 1% higher, as the Communist Party deals with slowing growth and an aging population.
Slippery oil patch
Beijing’s fertilizer purchases are up 48%, as it limits growth of coal-based production used to generate nitrogen products like urea. Crude oil and refined product imports are off 15% or more, giving the energy market some relief, at least on the demand side, though lower diesel production raised costs for shipping, adding to inflation.
Traders braced for higher energy costs after Iran ratcheted up attacks and waited nervously for interest rate changes ahead of the next meeting on monetary policy Sept. 15-16 at the Federal Reserve. Despite more calls for lower rates from the Trump Administration, futures on Federal Funds suggested the market believes a hike of one-quarter of 1% is likely, bringing the central bank’s target to 3.75% to 4%.
The latest Consumer Price Index confirmed those fears, rising 3.4% in August, adding to expectations for a Fed interest rate hike. Looming mid-term elections less than two months away increase pressure on the central bank to act now, if only to avoid any whiff of interfering in domestic politics. Wall Street could take any such news in stride, barring a major freak-out that spills over into commodities.