Big Corn and Soybean Yields Face Historical Downtrend
Arlan Suderman, Chief Commodities Economist at StoneX, analyzes the outlook for US corn and soybean crops following the USDA report and Midwest crop tour.
Key Takeaways
Historical patterns show yields often decline in years when estimates rise in August
Crop tour findings suggest no evidence of larger yields so far
Demand outlook remains uncertain with weak soybean exports and storage strain
USDA Reports and Acreage Adjustments
Suderman highlighted the USDA report that raised corn acreage and cut soybean acreage, describing it as a correction from earlier survey errors. He noted how markets quickly priced in the new expectations, with soybeans rallying and corn hitting fresh lows before rebounding. “The first job of the market is to price in the maximum potential size of the crop” [1:50].
Yield Patterns and Crop Tour Findings
Looking back at data since 1993, Suderman explained that yields often fall after USDA raises estimates in August. The Pro-Farmer Midwest Crop Tour reinforced this tendency, showing variability but no evidence of bigger crops. “The Midwest Crop Tour has basically said there’s no evidence to this point that the crop is bigger than what’s already been priced into the market” [4:48].
Demand and Export Challenges
On the demand side, domestic consumption appears steady, but soybean exports face challenges with China buying none so far this year. Suderman emphasized the limited US window before Brazilian supplies take over. “At this point, it’s not looking promising” [9:27].
Storage and Policy Uncertainty
Storage pressures add another layer of concern, with buyers warning of limited capacity as large wheat, corn, and soybean harvests collide. Basis levels have weakened sharply, suggesting further cash market stress. Biofuel policy decisions from the EPA remain a potential swing factor, with pending rulings on refinery exemptions possibly shaping soybean demand. Suderman concluded that conditions may worsen before improving, but policy support could still play a role.
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