KANSAS CITY, MISSOURI, US — There was a bit of something for everyone in the US Department of Agriculture’s (USDA) Aug. 12 Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports: a record forecast for US soybean production, the third-largest corn crop on record, slightly less wheat than in July but 9% more than in 2023, higher corn and soybean exports, and steady wheat exports, as well as lower cash corn, soybean and wheat prices.

August brought the first survey-based USDA production estimates for corn, sorghum, soybeans and other oilseeds, rice, cotton, sugar beets and cane and several other crops, plus revisions for all classes of wheat. Revisions for planted and harvested acres also were included in the Crop Production report, with many crops adjusted from the USDA’s June Acreage report. Favorable weather during the planting and growing seasons and improved moisture conditions resulted in summer crop condition ratings well above a year ago.

High yields were projected for many crops, including record-high yields nationally for soybeans, corn and spring wheat other than durum, and for certain individual states for those and several other crops. The new production estimates are key for supply and carryover revisions to the major crops included in the WASDE report for the 2024-25 marketing year.

Soybean futures closed at fresh four-year lows after the USDA data were released, while corn futures closed higher after trading near four-year lows during the Aug. 12 session. Wheat futures were mixed, with Kansas City and Chicago contracts lower but Minneapolis spring wheat futures higher.

Hanging over the corn and soybean markets was the adage, “Big crops get bigger,” which some expect will be the case in later USDA estimates. Others contend that since the USDA started at higher levels for corn and soybean yields and production, there may be limited upward potential.

Record soybean forecasts

The USDA on Aug. 12 pegged 2024 US soybean production at a record-high 4.589 billion bushels, up 154 million bushels, or 3.5%, from its July trend-line projection, and up 424 million bushels, or 10%, from 2023. The average pre-report trade estimate for soybean production was nearly 3% lower at 4.469 billion bushels.

The outlook for a record-high average yield also was unexpected with the USDA’s forecast at 53.2 bushels per acre, up 5% from 50.6 bushels per acre last year and nearly a bushel above the average pre-report trade expectation of 52.5 bushels per acre.

“You can’t look at this any other way than a significantly bearish report,” said Brian Harris, executive director and owner of Global Risk Management.

Indeed, after the reports were released midday on Aug. 12, soybean futures began tumbling, settling down 17½¢ at $9.71 a bushel in the September contract. The following day, the September contract endured a steeper drop of 24¢, settling at $9.47¼ a bushel. At midday on Aug. 14, the September contract had fallen about 23% to near-four-year lows since its rally in May.

The USDA forecast the carryover of soybeans on Sept. 1, 2025, at 560 million bushels, up 29% from its July outlook of 435 million bushels and up 62% from the current year’s carryover of 345 million bushels. The USDA left unchanged nearly all 2024-25 US soybean meal and soybean oil projections. Harris said such adjustments may be forthcoming after the new-crop soybean crushing season starts in early October.

In addition to high yields, the record-large soybean crop forecast also was the result of a sharp increase in planted and harvested acres. The USDA said 87.1 million acres had been planted to soybeans this year, up 4.2% from 83.6 million acres in 2023, and the August acreage data also was 1 million acres higher than the June Acreage report. The trade had expected reduced acres due to severe flooding in June and July across major growing areas in the Upper Midwest. Lost acreage was likely not reflected in the June Acreage report since that data was collected via surveys in early June and damage from the floods began later that month.

“All that flooding in the Midwest should have taken the total down somewhere between 250,000 and 500,000 acres, but instead the planted area was up a million acres,” Harris said.

Acreage was reduced in some Midwest states that experienced excessive summer rainfall. The August report did show soybean-planted area had been reduced from June by 150,000 acres in North Dakota and by 200,000 acres in Minnesota, but other flood-impacted states showed an increase in acres. Since the June report, soybean area in Iowa rose by 150,000 acres, and South Dakota was up by 350,000 acres. Parts of both states received more than 12 inches of rain in late June.

Surplus moisture may prove more beneficial than harmful, since heavy rain helped offset the impact of heat stress. Most row crops were maintaining their above-average condition ratings.

In the Aug. 12 Crop Progress report, the USDA rated soybeans in the 18 major growing states at 68% good-to-excellent, unchanged from the prior week, well above 59% at the same time last year and 8% higher than the five-year average for the date. Iowa, the second-highest producing soybean state, set a new season high with a rating of 77% good-to-excellent.

Also, some analysts said they believed a significant number of soybean acres had yet to be planted during the time of the flooding, and the saturated soils had likely provided ample moisture for the crop to endure the remaining summer months. The USDA showed a deficit of 410,000 soybean acres between its March Prospective Plantings and June Acreage reports, indicating there were areas that had yet to be planted, but the difference between the March and August reports was significantly higher, showing an increase of 610,000 acres.

Erin Nazetta, director of food and agriculture research at Broadview Group Holdings, LLC, said a shift from corn to soybean acres may explain the discrepancy.

“It could have been that farmers were intending to plant corn when they filled out the June Acreage survey but then ended up not planting corn and planted soybeans instead,” Nazetta said. “But I don’t know if there’s a way to necessarily confirm that.”

Regardless of when the acres had been planted and calculated, the latest data prove the US soybean market will likely be saturated with supplies in 2024-25. Despite the back-to-back days of double-digit declines in soybean futures after the Aug. 12 reports, Harris said he believes the soybean futures market has nearly reached its downside potential and pegged new crop soybeans at $9.60 a bushel.

“We’re probably not going to have much more room on the downside just simply because we’re getting so close to the cost of production,” Harris said.

Nazetta, however, indicated there still may be some downside potential left.

“I would love to say that markets historically correct to the production cost levels,” she said. “But I think we have quite a bit of time between now and when the next US crop needs to be planted, and markets do have a tendency to overcorrect both to the upside and to the downside. I do think that is going to play a factor, but I would unfortunately be hesitant to say that hitting the US cost of production for the farmer is going to be setting a strong floor to prices.”

With its tumbling prices, the US soybean market has been more competitive on the global stage. Harris said US soybeans were cheaper than the world’s top soybean suppliers from South America. However, amid economic struggles, the world’s top soybean importer, China, has delayed US soybean purchases in favor of abundant and relatively inexpensive South American supplies.

While the bears appear to be firmly in control of the soybean market, there were some bullish factors lurking in the background. Weather was still a swaying component for the crop.

“If we turn on the rain spigot and don’t shut it off during harvest, then there could be some quality damage across certain sections of the soybean belt, and the price could climb back up to around $10.25 a bu,” Harris said.

Record yield; large corn crop

The USDA forecast 2024 US corn production at 15.147 billion bushels, up 47 million bushels from the WASDE’s trend-line projection in July and down 195 million bushels, or 1.3%, from record-high production of 15.342 billion bushels in 2023. If realized, this year’s corn production will be the third highest on record.

The average yield based on conditions as of Aug. 1 was forecast at a record-high 183.1 bushels per acre, up 5.8 bushels, or 3.3%, from 177.3 bushels in 2023. Harvested area was forecast at 82.7 million acres, down 700,000 acres, or 0.8%, from the prior forecast and down 3.8 million acres, or 4.4%, from 2023. Record-high yields were forecast in most Corn Belt states.

The USDA corn production and yield forecasts were above average trade expectation, while the USDA harvested area estimate was below. Although corn futures closed higher on the day of the report, the gains did not hold in trading on Tuesday, Aug. 13.

“It’s a buyers’ market right now,” said Arlan Suderman, chief commodities economist at StoneX.

Because of the favorable weather outlook for the rest of August, Suderman sees the potential for corn production to go still higher.

“It’s difficult to confirm a low from the August report,” he said. “It’s hard to sustain a rally. The market is uncomfortable confirming a (price) bottom until September.”

July weather mostly was favorable during the key yield-making pollination period, and a cooler, wetter August could boost kernel size, which would result in more bushels. The September USDA production estimate adds field sampling to satellite images and farmer surveys used in August that will give a better idea of the crop’s size and the market more confidence in the USDA number.

The USDA rated the corn crop in the 18 major producing states as of Aug. 11 at 67% good-to-excellent, up from 59% at the same time last year. The good-to-excellent ratings in the two largest producing states of Iowa and Illinois were 77%. Pollination in the 18 states was nearly complete, with 94% in the silking stage as of Aug. 11. Crop development was ahead of the five-year average pace at 18% dented (drying down), compared with 12% as the 2019-23 average for the date, with Iowa at 30% and Illinois at 28%.

The USDA acreage adjustments were “reasonable,” Suderman said. He expected a lower harvested area estimate, a number that also will be fine-tuned in September, but said that “yield is the primary market factor going forward.”

In its WASDE report, the USDA projected the carryover of corn on Sept. 1, 2025, at 2.073 billion bushels, down 24 million bushels, or 1.1%, from the July forecast but up 11% from 1.867 billion bushels in 2024 and up 52% from 1.360 billion bushels in 2023.

For 2023-24, the USDA lowered use of corn to make glucose, dextrose and starch by 15 million bushels but raised exports by 25 million bushels, resulting in a drop of 10 million bushels in carryover from July. For 2024-25, the USDA raised supply 36 million bushels as higher production more than offset lower beginning stocks, carried forward the drop of 15 million bushels in the use of corn for sweeteners and starch, and raised exports by 75 million bushels (up 50 million bushels from 2023-24).

“I think the USDA created some new-crop (2024-25) demand to lessen the pain for farmers,” Suderman said. “I’m not sure you can justify some of the demand numbers.”

He suggested the USDA’s increase in corn exports did not jibe with its forecasts for production estimates in some other countries, especially Argentina, Brazil and Ukraine, all important export competitors. He posited that US corn exports may be 20 million to 30 million bushels too high for 2023-24 and said that with the 2024-25 export forecast even higher, “I just don’t see it.”

Suderman suggested it will be difficult for corn prices to sustain a rally over the next two quarters. Supportive “black swan” events include a possible rally in futures if managed funds are prompted to cover their large net short position. But the funds are comfortable with a large net short as long as growers hold large on-farm stocks, which they are likely to do amid current low prices. Some farmers were forced to sell stored old crop corn into a weak market to make room for new crop corn with harvest a couple months away in the key Corn Belt states.

“And you have to respect the wheat market,” Suderman said, adding that the USDA may not have accounted for lower wheat production in some key areas around the world that could boost US wheat exports and prices, pulling corn prices higher.

Smaller wheat crop estimate

The USDA’s revised wheat forecasts offered plenty to digest but had fewer fireworks than in corn and soybeans.

Perhaps the biggest surprise was the USDA lowering its 2024 all-wheat production estimate to 1.982 billion bushels, at the low end of the range of analysts’ expectations. The hard red winter wheat harvest in its final stages in the Dakotas and Montana came in higher at 776 million bushels, and white winter wheat was raised to 243 million bushels. Those increases were fully offset by the completed soft red winter wheat harvest estimated at 342 million bushels, plus other-spring and durum forecasts that came in below analysts’ expectations at 544 million and 77 million bushels, respectively.

Spring and durum crops in the Northern Plains are still projected to top 2023 by 8% and 30%, respectively. Spring wheat harvested acres were forecast down 6% from 2023 (to 10.33 million acres), with reductions in North Dakota, South Dakota, Minnesota and Montana offsetting an increase in Idaho. Durum harvested acres were projected higher in all states, for a 25% overall increase from 2023 to 2.017 million acres.

Enduring dryness in Montana compelled the USDA to lower expected yields there for spring wheat and durum. The expected North Dakota durum yield was reduced by 2 bushels to 44 bushels per acre, which still would be a record high if realized. North Dakota spring wheat production was forecast at 295 million bushels, up 10% from 2023, and the state’s durum crop was forecast at 48 million bushels, up 49% from last year.

“Together, that’s about 342 million bushels, but concurrent with North Dakota corn production at 524 million bushels and soybeans at 238 million bushels,” said Bill Lapp, founder and chief economist with Advanced Economic Solutions, Omaha, Nebraska, US. “Between corn and soybeans, they’ve got a lot of bushels to market, especially in the eastern half of the state, and it might be that they sell those crops and hold onto durum and spring wheat.”

Also on Aug. 12, the USDA slightly raised its forecast 2024-25 domestic use of wheat, left exports unchanged and lowered carryout on June 1, 2025, to 828 million bushels, down 28 million bushels, or 3.3%, from July but up 18% from 702 million bushels this year.

“That’s a modest change on the demand front, slightly better, but not where the market needs to be to absorb all those supplies,” Lapp said. “So we’re still in pretty tall clover on stocks. We’ve got increased corn stocks, increased soybean stocks, and it sure looks right now like we’ll have plenty of wheat stocks.”

The USDA reduced its projection for hard red spring wheat exports by 5 million bushels from July to 255 million bushels, but that still was an increase of 20 million bushels, or 9%, from 2023 and relatively strong compared with spring wheat exports in the past five years. Hard red winter wheat exports were left unchanged from July at 240 million bushels (a 79% increase from 2023), and soft red winter wheat exports were left unchanged at 110 million bushels (down 30% from 2023).

“Hard wheat export projections are up in comparison to very weak year-ago numbers, but the market is having a more normal start to export demand than we had last year,” Lapp said. “It’s worth keeping an eye on. We’re still uncompetitive in Europe to a large degree, despite their weather problems.”

The USDA lowered its global wheat carryover forecast by 620,000 tonnes from July to 256.62 million tonnes, down 5.74 million tonnes from this year. The lower carryout projections were a product of lower US and EU production estimates and increased world consumption that offset increased production forecasts for Ukraine, Kazakhstan and Australia.

“USDA added a million tonnes production in Australia; Canada at 35 million tonnes production probably has 2 million to 3 million tonnes upside; and more wheat in Ukraine offset a decline in Europe,” Lapp said. “So there still seems to be adequate supplies of wheat for sale out of major origins. Canada’s production prospects look pretty good, and at some point, the market needs Canada to let go of some of their wheat, but at lower prices. Canadian and North Dakotan farmers can be pretty reluctant to do that.

“The market hasn’t reflected the need for US wheat yet, something we’ve been waiting for since 2022. We’re still not competitive, and it’s hard to say what’s going to change that. The market still seems to be one that has difficulty earning the carries.

“I think most end users would say we’re still historically high, not terribly so, but on the high side of where we’ve been in the past, which is a fair assessment. But unless the yield on corn goes up another 4 bushels per acre or soybeans get 100 million bushels larger, we’re close to finding a floor on prices, even at this early stage in mid-August.”

Wheat futures prices could move in mixed directions nearby, Lapp said.

“I’m biased marginally lower in Kansas City, where it’ll be tough to earn the carries,” he said. “KC December may go to plus-or-minus $5.50 per bushel, with some spikes maybe lower. Putting 40¢ on top would get close to where Minneapolis December should be, and perhaps a dime discount to $5.40 a bushel in the Chicago December.”

In the durum market, Chicago gateway prices were hovering around $10 per bushel, down about $4 from a year ago but still historically strong.

Wheat and flour market watchers would be wise to keep an eye on funds.

“Funds’ actions are so hard to predict, and grouping them into one monolith is wrong, in my view,” Lapp explained. “They have proven over the past 60 days their ability to really press markets. If things go smoothly weather-wise, and we get a steady-to-larger crop, funds could make one more run into lower prices in the market. Earlier this year, funds were buying anything in sight. Those are 30¢- to 50¢-a-bushel moves that have no fundamental backing. I won’t predict that, but it remains a possibility that could bite us.”

Corn, soybean and wheat supplies appear ample for 2024-25, which is good news for buyers. The USDA lowered from July its forecast of average prices paid to farmers in 2024-25 by 80¢ a bushel for wheat and 10¢ a bushel for corn and soybeans, while nearby futures prices for all three commodities have been hovering near four-year lows.