The October USDA WASDE report has long been a market mover, but this year, farmers and traders didn’t get one. A government shutdown suspended the highly anticipated report, potentially robbing the market of its best near-term catalyst for price movement. But even without the data, experts say there are strong bullish forces at work for both corn and soybeans.
Reality Check: Corn Stocks Are the Tightest Since the Drought of 2012
Even with USDA’s last yield forecast pointing to a record corn yield this year, there’s a simple reality you can’t ignore: Global supplies are tight.
“If you look at global stocks of corn relative to use, we’re the tightest we’ve been in over a decade — since the 2012 drought,” says Ben Brown, senior research associate and Extension agricultural economist at the University of Missouri. “And if you take the U.S. and China out of the picture, it’s the tightest supply-to-use ratio in at least 30 years.”
This means the rest of the world is operating with razor-thin reserves, and any production hiccups — like potential challenges in Brazil’s second corn crop — could send prices higher. Markets like Mexico are already increasing purchases, creating more pricing opportunities for U.S. producers.
October WASDE: A Missed Market Spark?
Market analysts were eyeing the October WASDE report, which was scheduled to be released this week, as the best chance for USDA to trim yield estimates for both corn and soybeans, potentially igniting a rally. But with the report suspended due to the government shutdown, that spark never came this week.
“October was the month where we’d get a better picture of what was happening,” Brown says. “With combines rolling and harvest well underway, USDA would’ve had strong data to work with. I have to imagine, given the dryness in the Eastern and Southern Corn Belt, later-harvested soybeans are going to have tough yields. That could have provided a bullish spark for soybeans as well.”
Lower yields would help chip away at the massive 18+ billion bushels of corn the U.S. has to work through, tightening the balance sheet further and supporting prices.
Rumors of China’s Quiet Buying Fuels Price Momentum Earlier in the Week
Even in the absence of USDA’s weekly export sales reports, another report that’s suspended due to the government shutdown, corn and soybean prices showed surprising strength.
Brown explains that rumors of Chinese buying have allowed basis markets in key regions to firm up.
“We haven’t gotten any USDA reports the last couple of days,” Brown says. “There’s been speculation that China has been sniffing around for soybeans. Because export data is delayed, they’re able to come into the market without being seen right now, and that’s firming nearby basis levels.”
Traders are watching the spreads between nearby and deferred contracts closely. When nearby contracts rise relative to deferred ones, it often signals near-term demand. Brown says the spreads are indeed pointing to strong corn demand, with opportunities emerging on the soybean side as well.
Fertilizer Prices Surge: Tariffs, Sanctions and Global Demand
A spark in the commodity markets is something farmers are desperately awaiting. That’s as high fertilizer prices offer no reprieve on the cost side of the equation. As farmers harvest their 2025 crops, they’re also locking in fall fertilizer — and facing sticker shock.
Bob Maltsbarger, senior research economist with FAPRI at the University of Missouri, says it’s a perfect storm causing the run-up in prices:
- Global demand remains strong, with large acreage in both the U.S. and South America
- Tariffs on Morocco and other countries have disrupted phosphate imports
- Sanctions on Russia, which supplies about half of U.S. UAN (urea ammonium nitrate), have tightened supplies
- Domestic production helps on anhydrous, but not enough to offset price hikes
“If you look at the AMS report out of Illinois on Oct. 3, anhydrous ammonia was $132 more per ton compared to a year ago,” Maltsbarger says. “Urea and nitrogen are up 13% to 19%, UAN for 32 is up almost 50%. Potash is the ‘shining light,’ only up 8%.”
With crop prices flat to slightly lower than last year, this means tighter margins for 2024.
Looking Ahead: Acreage Could Shrink Next Year
Maltsbarger notes FAPRI’s September outlook predicts a drop of 2.5 million planted acres across the top 13 program crops in 2024 due to these squeezed margins.
“If we don’t see a break in prices, more Chinese demand or some form of ad hoc assistance, farmers are facing even tighter margins next year,” he says.
Bottom Line
Even without the October WASDE, market fundamentals are tightening:
- Chinese buying rumors are quietly supporting prices
- Global corn stocks are the tightest in decades
- Potential yield reductions were missed in October, but could still come later
- Fertilizer prices are spiking on global demand and trade policy shifts, pressuring farmer margins
All this sets the stage for a potentially bullish setup for corn and soybean prices — but with volatility likely ahead as the market waits for official data and watches global weather closely.
