Last year’s August WASDE report sent shockwaves through the corn market with a record 188.8 bushel yield and 2 million more harvested acres. Traders were concerned about a repeat performance this year.
However, while USDA did raise harvested acres for both corn and soybeans, it was offset by lower yields. An aggressive 2.3 bu. per acre cut to corn and strong demand helped tighten corn balance sheets.
Corn Yield Cut Highlights Bullish August Report
The bullish headline of the August WASDE came from the cut in corn yield to 180.7 bushels per acre. The 2.3 bushel cut fully offset the increase in harvested acres.
Jim McCormick, AgMarket.Net, explains the balance.
“They revised it up 1.2 million. So kind of in line what people are thinking. And like you said, they did make a yield adjustment. They did lower the corn yield 2.3 bushels. So the net effect for the production, interesting enough, was pretty much unchanged. So the less yield was offset by the higher acres,” he says.
Corn production came in at 16 billion bu. Ending stocks were lowered by 137 million bu. to only 1.7 billion due to strong demand.
“The government was looking for strong demand. The trade has been looking for strong export demand. They raised new crop exports by 75 million, and they raised old crop exports by 75 million, netting a sharp drop in ending stocks,” McCormick says.
Will Corn Yields Fall Further?
Western Corn Belt states were down significantly from last year. But they were offset by Iowa with a corn yield at 216, up 6 bushels from 2025. Illinois came in at 212, down just 2 bu. from last year. That figure may be high.
“Last year, the big crop came from the west. The east had an OK crop. This year, it is going to be if we do end up managing to keep this crop over a 180 national yield, it is going to be the east. I would argue that’s going to be doing the heavy lifting,” McCormick says.
Soybeans See Acreage Increase, Yield Decline
USDA made similar adjustments for soybeans. The agency raised harvested acres 1.4 million but lowered yield .3 bushels to 52.7.
McCormick thinks yield could flex with farmer surveys taken as of August 1.
“They did lower that yield by three-tenths of a bushel. It’ll be interesting to see if that yield stands. In general, the market is usually bearish yield pressure arguments when you get rain in August. And in general, a lot of the Midwest have seen rain in August,” he says.
Bottom line: Soybean production was raised 44 million bushels. New crop ending stocks were raised 10 million bu. to 320 million.
“So they raised crush 30 million, offsetting a big chunk of the raise in production. But the net effect was the carryout did grow a little bit,” McCormick says.
China Could Tighten Soybean Balance Sheet
USDA left soybean exports unchanged. But that could change with China in the market, unlike last year at this time.
“If China would come to fruition and they would start buying above 15, 16 million metric tons and the assumption is maybe they will get to that 25, that could pull down the balance sheet a little bit more snug,” McCormick says.
Wheat Remains Neutral
The August WASDE was neutral for wheat. U.S. ending stocks dropped just 5 million bushels to 717 million. Global wheat stocks were raised nearly a half million metric tons.
