Corn and soybeans ended higher Thursday with wheat, cattle and hogs lower.
Corn Bounces
December corn was 2 cents higher closing at $4.62.
The market was able to bounce off technical support and has continued to hold Monday’s lows.
Mike Castle of StoneX says with a lack of any major news, corn saw a bit of positioning ahead of the Aug. 12 WASDE Report.
“All eyes are in the market on that report here next week. The August WASDE is always a very big one, right? This is our first look at state by state yields, kind of a big determining factor toward the supply side of the balance sheet. But it’s also important to keep in mind, you’re likely to see some estimate changes on the demand side of the balance sheet, which I do think will be the bigger driver in the year ahead,” he says.
StoneX Estimates 184.8 BPA on Corn
StoneX released it survey bases yield and production estimates this week which were based on farmer and elevator survey responses.
Corn yield was at 184.8 bu. per acre, 1.8 bu. above trend line yield with soybeans at 53. bu.
Castle says the higher than trend line yield on corn was a little bit of a surprise because it was on the higher end of expectations but still reflects the crop being worse than last year.
“If you remember last year, the August StoneX survey came out at 188.0. Obviously, that was a fair bit above where USDA was sitting coming in. But then on the August WASDE, they came in at 188.8. So it was actually a little bit low compared to where USDA ended up,” he says.
Still the 184.8 is not the final number and will be updated with last year’s final yield ending up at 186 bu. per acre relative to USDA’s final 186.5 bu. He points out there are still changes possible in August with the weather.
“The further north you go where a lot of the weather risks still are today particularly in places like the Dakotas there’s certainly a lot that can change between now and then. We kind of have to see how the weather develops in the weeks ahead,” he remarks.
Corn Yield Too High?
With corn ratings 12% below a year ago nationally on corn it is easy to argue that the 184.8 bu. yield may be lofty, in fact less than trend line might be more reasonable.
Will corn yield come down as a result in the future or is there a remote chance corn yield could climb higher?
Castle says, “I think the potential for either direction is still there.”
He points to the excellent crop that is developing on his family farm in central Missouri where the corn only had slight tip back but overall conditions and yield potential are high in the rest of the field.
“The reality is there are still parts of the country that look very good, despite some crop tours showing mixed results. That’s kind of the importance of taking a step back and trying to aggregate everything at the national level, because ultimately that’s what’s going to dictate the, I guess, broader market movement, right? Instead of looking specifically at one locale.”
Soybeans Bounce with China Sales
Soybeans also bounced off chart support with the confirmation of 4.5 million bushels of new crop soybeans sold to China. However, there were rumors Wednesday of 12 to 15 cargoes.
Castle says China is keeping pace on sales better than he expected. “As an economist, you kind of try to frame everything in terms of economics right but what’s very different about what’s happening right now is this has nothing to do with economics this is entirely about politics.”
His analysis shows a drop in the dollar value of exports from China to the U.S. from 2024 into 2025 of $130 billion dollars year on year. Those exports were the lowest in U.S. dollar terms since 2009.
“So again, it kind of is just this reflection that China can overpay on even that full volume of soybeans and the amount they’re going to overpay on that is a drop in the bucket compared to what they would stand to gain from fuller access to the U.S. consumer market,” he explains.
New crop soybean sales were solid Thursday morning at 33.2 million bu. but he thinks that number will be much higher next week due to the large amount of flash sales reported this week.
“Just since Monday, we’ve seen, I think, 870,000 maybe 872,000 metric tons of soybean sales just on the flash sales. And obviously there’s more that doesn’t get captured in that. So that’s something worth keeping an eye on. I know everyone kind of wants to focus on yields right now. But I really think demand is the bigger story.”
He says new crop soybean sales are at their strongest pace since 2022. And we are crushing significantly more soybeans than we were back then with a record year on tap.
So the U.S. could run out of beans if China meets the 25 MMT commitment.
China Sales Total
Currently Castle says China has bought around 6 MMT of the 25 MMT expected.
“After this week, they’d be probably 6 million plus. So it’s, again, yeah, so they’re probably still, you know, between 20% and 25% of the way purchased at this point.”
But again, if China legitimately bought 25 million tons Castle says prices would have to rise considerably to ration exports.
Corn Exports Also Strong
Corn exports are also running at record pace says Castle.
“We’ve ever seen cumulative corn export inspections surpass 3 billion bushels in a year. USDA is already too low on their export target for old crop. We’ve already sold over 100 million bushels more than what they currently have in there.”
So he expects USDA to increase exports in the Aug. 12 WASDE and cut feed and residual.
Wheat Sees Technical Selling
Wheat futures saw technical selling and disappointment as weekly exports were only 10.9 million bu. and are running well behind last year’s pace.
“We saw a little bit of profit taking from some of the funds that bought it on that big run up that we’ve seen. It kind of goes back to that old saying of the bulls need to be fed daily. And we didn’t get as flashy of a headline out of the Black Sea.”
However he says fighting is escalating and grain movement is restricted, which will at some point have an impact.
“A lot of the North African and Mediterranean producers had bigger local wheat crops so maybe they’re able to kind of hold off on having to come to the table on the import side a little longer than normal, but there still maintains this risk othings stay disrupted when all those
buyers start coming back to the table.”
And that when the U.S. could pick up exports from other markets.
Cattle Hit Chart Resistance
The cattle market saw triple digit losses with profit taking setting in after the market technically hit resistance at the 50% retracement levels.
Castle says, “So that could be a function of, you know, remaining length from managed money kind of selling off, taking some profits, especially, you know, like you alluded to there, we had seen a bounce here.”
The lower stock market and higher crude oil prices also spilled over to pull down the market.
He says managed money traders are trying to find places to park assets with all the uncertainty geopolitically. That money flow may have impact the cattle market.
Cash news was positive at $235 to $236 live.
“Obviously it’s been kind of light volume, but that’s, you know, kind of to be expected for this time. of year.”
