Corn and Soybean Risks Remain Despite USDA Yield Cuts

USDA Boosts Corn and Soybean Yields, but Demand Questions Persist

Key Takeaways

• USDA cuts corn and soybean yield estimates, but higher acreage kept stock totals steady
• Suderman warned global trade pressures make USDA’s demand projections look overstated
• A Supreme Court ruling, Brazil’s weather, and biofuel policy loom large for fall markets

Markets Unfazed After USDA Data but Suderman Urges Caution

The USDA’s September WASDE report didn’t rattle the markets – and that, according to Arlan Suderman, was the biggest news. “The numbers didn’t surprise anyone in a bearish way,” said Suderman, Chief Commodities Economist at StoneX. “Yields were down a touch. Acreage moved higher. Demand barely budged. And that kept the balance sheets stable enough for now.”

Corn and soybean yields came down slightly, but not dramatically. Acreage increases offset the impact, and ending stock estimates held close to previous projections. As Suderman put it, “the market exhaled.” But that calm may be short-lived.

Corn Yield Estimates Drift Lower, But Supply Still Large

 

Source: Reuters Eikon, USDA, StoneX Estimates

 

Corn and Soybean Demand Outlook Weakens Without China

Suderman’s bigger concern isn’t on the supply side, it’s demand. He flagged USDA’s corn export and feed use projections as particularly aggressive. “You can’t have strong U.S. feed demand and also expect Mexico to pick up the slack with their own cattle feeding,” he said. “Both can’t be true at once.” Soybeans raise a different red flag. China hasn’t been a player in early U.S. export sales, and Suderman doesn’t see that changing without a formal agreement. “We’re well into the window when China typically books large volumes. So far, they’re absent,” he said.

Suderman projects exports at least 150 million bushels under USDA’s figure and says the gap could widen to 235 million bushels if no trade deal materializes. Without China, domestic processors can’t absorb the gap. "We don’t have the crush capacity yet, no matter how bullish biofuels look on paper.”

China Missing From U.S. Soybean Export Bookings

 

Source: USDA, StoneX Calculations

 

Tariffs, Brazil’s Weather, and Biofuels Lead Fall Risks

Suderman is keeping his eye on three macro factors that could steer the market before year-end:

• A Supreme Court Ruling A decision is expected on the legality of former President Trump’s reciprocal tariffs. Suderman cautioned that if the Court rules against them, existing trade deals could unravel, U.S. leverage over China would weaken, and demand for U.S. ag commodities could take a hit.
• South America’s Start Brazil’s planting season is underway, but early rainfall projections are wildly split. “Model history suggests we’re leaning toward another dry start,” Suderman noted, citing past underperformance by the wetter European forecast models.
• Biofuel Stalemate Regulatory decisions on Renewable Volume Obligations (RVOs) and small refinery exemptions (SREs) are delayed. “Until we get direction from Washington, the bean oil market is stuck in limbo,” Suderman said. “And that could last into early 2026.”

Brazil’s Forecast Models Diverge as Planting Begins

  

Source: ECMWF, GFS, WeatherBell, Nutrien

One other variable to watch: seed size. High pod counts might not translate into high yields if the beans themselves come in small. “We’ll need to wait until October’s matured crop data to get a clearer picture,” he added.

 

To watch Arlan Suderman's full September Market Outlook on demand, click here.

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–– Written by: Andy Catsimanes

–– Expert: Arlan Suderman, StoneX Chief Commodities Economist