Perspective: Mid-Day Commentary for August 20

By: Arlan Suderman, Chief Commodities Economist

Wed, 20 Aug 2025, 18:26

August 20 - Stocks continue to slip lower today as Wall Street prepares for Federal Reserve Chair Jerome Powell's final Jackson Hole Symposium speech on Friday morning. It's widely expected that Powell will be replaced as chair by President Trump, with Trump's nominee for the position expected to be announced soon. The relationship between Powell and Trump has been very tense, with Trump trying to influence the central bank toward lower interest rates that would stimulate the economy while lowering Federal debt servicing costs. The Federal Reserve just released the minutes of its July meeting, showing that the two dissenting votes to the policy at that time were the only ones arguing for lower interest rates - a disappointment for Wall Street.

The tech sector continued to lead the way lower for stocks today, with the VIX slowly creeping upward toward 17. The dollar index is trading near 98.2. Yields on 10-year Treasuries are trading near 4.29%, while yields on 2-year Treasuries are trading near 3.74%. Crude oil prices are bouncing by more than 1% today as they consolidate back above $63 per barrel, while the grain and oilseed sector is mixed to firmer. Grain and oilseed prices are largely consolidating within their recent trading ranges. Wheat prices are consolidating near contract lows as U.S. wheat fights to remain competitive on the global market. Russian exports continue to lag expectations due to slow farmer selling, but that may pick up in the weeks ahead as production estimates creep higher. Yet, quality / logistics issues in Europe / Black Sea continue to support demand for U.S. quality milling wheat at these low price levels.

Corn and soybean traders continue to monitor the Pro Farmer Midwest Crop Tour. Tour scouts are moving through the best parts of the Midwest today and tomorrow. Yes, they're finding occasional problems, but no big surprises thus far. The first two days of the tour produced yields generally below USDA, but that's not unusual, due to the routes focused on by the scouts, and the methodologies followed relative to USDA's more comprehensive way of doing things for its reports.

As such, Pro Farmer results are best compared with previous year's numbers to get a sense of how the crops are performing. I included tables below showing how Pro Farmer's August yield estimates compared to USDA's final yield numbers published in January going back to 2012 - minus the pandemic year of 2020. Note that Pro Farmer's corn and soybean yields came in below USDA final yields in 75% of those years. Averaging all years together in that span resulted in Pro Farmer coming in roughly 3.2 bushels lower than USDA's final yield for corn and about a bushel lower for soybeans. For its part, the trade is looking for any indication that the crops are bigger than what has already been priced into the market. It's too early to say for soybeans, but for corn, I don't see anything yet to indicate that it is any bigger, which would allow traders to start focusing on the demand side of the ledger going forward. Does that mean that the corn market put its harvest low in following last week's USDA report? Maybe, but that's also assuming that we don't get any more surprises.

But a bottom in the futures market doesn't necessarily mean a bottom in flat cash prices. The cash market will tell the real story of the pain in farm country over the next few months as this year's big crops seek a home. Farmers will want to store much of this year's crops, hoping for a rebound in prices as we go through the marketing year. But there will not be enough storage for this year's big crops, especially since the farmer has generally sold less of the upcoming harvest than normal due to this year's low prices. The problem is aggravated by the lack of Chinese buying this year - especially for soybeans. Some buyers focus primarily on the rail market for reselling soybeans that they purchase from farmers. The possibility of not selling soybeans to China this year makes them reluctant to commit to purchases from farmers. Other buyers are worried about not having enough storage space available. Processors largely have much of their early needs already purchased in some regions. As such, we're already seeing some buyers communicate to farmers that they will have limited to no interest in taking in soybeans in particular for storage, with corn and wheat being the priority for storage this year. What does this mean? The cash market manages supply and demand in the basis market, so even though the futures market "may" have found a bottom, that doesn't mean that the cash market has found a bottom. It may continue to fall in the weeks ahead.

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Perspective: Morning Commentary for August 4

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Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

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Mike CastleFri, 31 Jul 2026, 16:33

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