Corn and soybean markets closed sharply mixed on Tuesday on what was one of the more notable WASDE updates in the past several months. USDA unexpectedly shifted corn acres drastically higher while subsequently subtracting from the soybean side, which produced heavy selling in the corn market and another day of buying in the soybean complex. Everything else, including trade, took a back burner for the day, with US supply once again front and center.

🌽 Corn Market Update

📈 Prices:

• September Corn (CU): $3.71 1/2, down 13 1/2 cents; new contract low at 3.68 3/4
• December Corn (CZ): $3.94 1/2, down 13 1/4 cents; new contract low at 3.92
• September/December Spread (CU/CZ): -23, down 1/4 cent; new contract low at -23 1/4

📋 Market Headlines:

• Private exporters this morning reported daily sales flashes of 315,488 MTs of corn for delivery to Mexico; of the total, 20,830 MTs is for delivery during the 2024/25 marketing year and 294,658 MTs is for delivery during the 2025/26 marketing year.

• USDA made a massive adjustment higher in the 2025/26 corn crop in this morning's update, raising their yield estimate to a record 188.1 bu/acre and also raising planted acres to more than 97 million; the combination resulted in production being up more than 1 billion bu from last month at 16.472 bil bu.

• Other notable balance sheet adjustments included a 70 mil bu increase in old crop exports, as well as a 30 mil bu reduction in old crop ethanol demand; for new crop, feed and residual was raised 250 mil bu from last month, ethanol was raised 100 mil bu from last month, and exports were raised 200 mil bu from last month. The demand increases helped to offset a portion of the massive jump in supply, leaving ending stocks at 2.117 bil bu.

• At the world level, ending stocks were up nearly 10 MMTs from last month at 282.5 MMTs, which was well above the average trade guess and largely the result of the massive increases in the US crop; there were no adjustments to the crops in Brazil or Argentina, while Chinese corn production was lowered 1 MMT to 194.2 MMTs. China's old crop imports were also lowered 1 MMT to 4 MMTs, while there was no change made to Mexico's imports.

Summary:

Not hard to guess what the news maker was today in the corn market, with the USDA's production figures acting as a pretty big bombshell to most traders and sending both crop years to another round of new contract lows. In our opinion, the market reaction was probably not based on the yield number but was likely more so the result of the planted acreage number, which caught nearly everyone by surprise. We would also mention that demand increases totaling more than 500 mil bu were possibly over done, otherwise ending stocks could've ballooned even further. The table is set for a massive harvest, with the question of just how big might big be seemingly continuing to linger.

🌱 Soybean Market Update

📈 Prices:

• September Soybeans (SU): $10.12 3/4, up 21 cents
• November Soybeans (SX): $10.32 3/4, up 21 1/2 cents
• September Soybean Meal (MU): $281.40, up 60 cents/ton
• September Soybean Oil (LU): 53.24, up 0.05 cents/lb
• September/November Spread (SU/SX): -20, down 1/2 cent; new contract low at -21

📋 Market Headlines:

• The increased corn acres came at the expense of soybean acres, with the USDA showing planted acreage down 2.5 million from last month at 80.9 mil. Yield, however, was increased further to 53.6 bu/acre, bringing production to 4.292 bil bu.

• Balance sheet-wise, there was little of note o n the old crop side other than a 10 mil bu increase in both crush and exports which led to a 20 mil bu decline in ending stocks. Things were also fairly quiet on the new crop, with the only notable adjustment being a 40 mil bu reduction in exports; this was more than offset by the lower production figure, which put ending stocks at 290 mil bu, down 20 mil bu from last month.

• On the global side, the report showed world ending stocks at 124.9 MMTs, which was down from 126.07 MMTs last month and also well below what the trade was looking for. There was no change made to Brazil's bean crop estimate, but Argentina was raised 1 MMT to 50.9 MMTs. There was also no change made to China's import figure.

• We briefly touched on this this morning, but China announced overnight last night that they would be imposing additional trade duties on imports of Canadian canola following an anti-dumping probe that was launched last September. The new duties are expected to be at 75.8% and are set to go into effect on Thursday. China is the world's number one canola importer, and sources nearly all of its supplies from Canada.

Summary:

What was seen as a negative in the corn market was a clear positive in the soybean market, as the lower production and acreage estimates led to prices closing sharply higher for a second session in a row. In our opinion, while the supply side of the debate will still continue for another month or two, longer price direction and how the balance sheet leans is going to be almost entirely dependent on China. If no deal and China doesn't buy US beans, the export forecast is significantly overstated and ending stocks will likely be much higher; if Trump does secure a deal with China and they agree to even double their US purchases (let alone quadruple), the current export forecast is possibly too low. The other lingering question to us is does a CBOT rally and lower planted acres in the US encourage additional Brazilian seeded area in the months ahead? We will see.

🌾 Wheat Market Update

📈 Prices:

• September Chicago Wheat (WU): $5.05, down 10 cents; new contract low at 5.03 1/4
• December Chicago Wheat (WZ): $5.26, down 9 1/2 cents; new contract low at 5.24
• September/December Spread (WU/WZ): -21, down 1/2 cent

📋 Market Headlines:

• Quieter report in the wheat market this morning as balance sheet adjustments were mostly minimal; new crop exports were raised 25 mil bu to 875 mil, which dropped ending stocks 21 mil bu to 869 mil. Production changes were also minimal, with a slightly higher winter production figure offsetting a slightly lower spring production figure.

• On the world side, ending stocks came in at 260.1 MMTs, which was down just marginally from both last month and the average trade guess. There were no notable updates in global production, while EU exports were adjusted higher by 0.5 MMTs and China's imports were adjusted higher by 0.2 MMTs.

Summary:

Wheat futures struggled on Tuesday despite the WASDE report not offering a ton to either the bulls or the bears, as sympathy selling with corn was the theme for most of the day. The ballooning corn crop, and also additional sorghum supplies, means the US will be flush with feed grains through the end of the year, which along with global price pressure, will likely keep rallies subdued in the short term.

📰 In Other News

• Livestock markets traded mixed on Tuesday:
• October live cattle: $229.02, up $2.92
• September feeder cattle: $346.25, up $5.65
• October lean hogs: $91.60, down 17 cents

• Outside markets again traded mixed on Tuesday on another round of mostly as-expected inflation data:
• Crude oil futures: down 60-80 cents/bbl
• Stock index futures: The Dow Jones index is up 490 points, the S&P500 index is up 70 points, and the NASDAQ is up 300 points
• US $ Index: down 40-50 points

• Sources reported overnight last night that President Trump and South Korean President Lee will hold a summit on August 25th to discuss economic cooperation and other strategic alliances between the two.

🌦️ Weather Outlook

⚡ Short-term Forecast:

• The mid-day GFS model run shifted back a little wetter this afternoon after trending drier overnight, but the forecast otherwise was little changed. Ridge-riding thunderstorms will continue to impact the northern/northwestern Corn Belt the remainder of this week, while tropical activity in the Gulf keeps the southeast wet also.

• Temperatures look to remain average to slightly above average this week, but there continues to be little to no extreme heat risk in the short term.

📆 Extended Forecast:

• Further out, week tow precip maps were slightly wetter at mid-day today in the southeast, but otherwise were also little changed here as well. Following rains this week and last, there is good model agreement on a drier patter for the northwestern Corn Belt then beyond next week.

• 10-15 day temperature outlooks trended cooler again at mid-day today, and now offer well below normal air temps for most all of the US east of the Rocky Mountains.