Low Stocks, High Risks Define 2025 Growing Season, Says Suderman
Key Takeaways:
- USDA’s corn and soybean export projections are overly optimistic says Suderman, leaving room for downside corrections
- Weather risks are elevated as dry patterns and sea surface temps threaten Midwest yields
- Tariff pauses with China boost confidence, but not grain prices – for now
USDA Projections Set the Stage for Volatility
Arlan Suderman, Chief Commodities Economist at StoneX, opened his May 2025 WASDE webinar with a blunt assessment: USDA's low ending stocks for corn and soybeans are “just low enough to make weather matter.” While the agency pegs 2025/26 corn carryout at 1.8 billion bushels and soybeans at 295 million, Suderman believes both numbers are too low given strong South American supply and weak export prospects.
“Do I believe these numbers?” he asked. “No. But the market will trade them anyway.” That sets up a summer where weather shifts could drive large price swings, especially with speculative money sitting mostly on the sidelines.
Corn and soybean carryout levels are low enough to amplify the impact of any weather disruption this summer.
Source: Arlan Suderman, Reuters Eikon
USDA Forecasts Signal a Risky Summer for Grain Markets
The threat of drought looms large. Suderman walked viewers through soil moisture maps, analog drought years, and sea surface temperature data. The placement of high-pressure systems – shaped by Pacific water temps and existing dryness – will be critical. A shift just 500 miles east or west could decide whether the Midwest gets timely thunderstorms or another yield-crushing dry spell.
Dryness across the northern Plains and western Corn Belt could help lock high pressure systems into place, thereby limiting summer rainfall.
Source: Arlan Suderman, NOAA & Commodity Weather Group
Trade Pause with China Brings Relief… For Now
Markets cheered the 90-day tariff pause between the U.S. and China, but Suderman stressed it’s “a trade pause, not a trade deal.” The agreement excludes critical sectors like ag commodities, which remain under tariff pressure. Retailers are likely to use the window to rebuild inventory, and Suderman expects a surge in container exports from China in coming weeks.
The market has shifted from pricing in worst-case trade war scenarios toward a more hopeful but still uncertain middle ground.
Source: Arlan Suderman
Even with a tariff truce in place, markets aren’t breathing easy. Suderman sees a summer shaped less by diplomacy than by drought – and numbers that may not hold up when the weather turns.
Watch the May episode on demand here.
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–– Written by: Andy Catsimanes
–– Expert: Arlan Suderman, StoneX Chief Commodities Economist
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