By: Andrew Catsimanes, Copywriter • Production
Key Takeaways
Arlan Suderman, chief commodities economist at StoneX, said the August USDA WASDE (World Agricultural Supply and Demand Estimates) report surprised markets with record-high yield estimates for both corn and soybeans, alongside a sharp increase in corn acreage. The data showed corn at 188.8 bushels per acre and soybeans at 53.6, both above trade expectations and previous records.
Record Corn and Soybean Yields Top All Trade Estimates
Source: USDA, Reuters Eikon, StoneX
While traders anticipated strong yields, Suderman noted that the acreage increase to 97.3 million – well above prior counts – likely drove the post-report selloff. “The market had priced in high yields,” he said. “It was caught off guard by the big increase in acreage”.
USDA’s balance sheet lifted corn ending stocks to 2.117 billion bushels, even after raising feed, ethanol, and export use.
Suderman noted that Mexico’s corn imports are rising in part because a closed U.S.–Mexico cattle border is forcing Mexican feedlots to source more feed domestically. With Mexico already corn-deficient, this has boosted new-crop sales from the United States.
U.S. New-Crop Corn Export Sales to Mexico
Source: USDA, StoneX
Suderman questioned the sustainability of the 250-million-bushel increase in feed usage, suggesting revisions could come in January if yields hold near current estimates.
Despite the record soybean yield, USDA lowered harvested acres by 2.5 million, keeping production just under 4.3 billion bushels. Suderman warned that USDA’s 1.705-billion-bushel export target may be difficult to achieve with “zero soybeans on the books” for China ahead of the new marketing year.
U.S. New-Crop Soybean Export Sales to China
Source: USDA, StoneX
While sales to Mexico are strong, South American competition and currency effects have tilted Chinese demand toward Brazil and Argentina. “Even if other buyers step in, it doesn’t make up for the loss of China,” Suderman said.
Suderman tied market uncertainty to ongoing tariff disputes, political pressure on the Federal Reserve, and geopolitical tensions involving China, India, and Russia. He also pointed to weather risks, including high overnight temperatures in the eastern Midwest that could limit final yields.
Looking ahead, he said Midwest crop tours and USDA’s September field-based yield survey will be pivotal. “History suggests yields often decline from August,” Suderman said. “But the market won’t focus on demand until it’s confident about supply.”
To watch Arlan Suderman's full August Market Outlook on demand, click here.
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–– Written by: Andy Catsimanes
–– Expert: Arlan Suderman, StoneX Chief Commodities Economist
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