Surprise USDA Report Sends Grains Prices Soaring
Estimated reading time: 5 minutes
- USDA report revisions sparked a surge in US corn and soybean futures.
- Soybean production was lower than expected, tightening the supply outlook.
- Corn ending stocks were also reduced, contributing to price increases.
- CBOT corn and soybean contracts saw significant gains.
- The market displayed strengthening backwardation for both commodities.
Contents
At 20:00 UTC on August 29, 2025, the US Department of Agriculture (USDA) released its updated World Agricultural Supply and Demand Estimates (WASDE) report, triggering a significant rally in US corn and soybean futures. The report contained surprise revisions to production and supply figures for both commodities, leading to the most significant fundamental-driven price movement in the commodities markets over the last 12 hours. The unexpected changes fundamentally altered market expectations, sending shockwaves through the agricultural commodity complex.
The USDA’s key revisions centered on a sharper-than-expected reduction in the 2025 harvested soybean area and an upward revision to average yields. The agency cut the harvested soybean area by 2.4 million acres from its July estimate, bringing the total to 80.1 million acres. Simultaneously, the USDA raised the average soybean yield to a record 53.6 bushels per acre. The net effect was a total soybean production figure of 4.292 billion bushels—43 million bushels below the market consensus forecast of approximately 4.367 billion bushels. Source
Adding further upward pressure on soybean prices, the USDA also reported old-crop soybean ending stocks at 330 million bushels—below market expectations. Source This unexpected tightening of the soybean supply outlook fueled a significant price increase.
The USDA’s corn report also contained revisions. Old-crop corn ending stocks were reduced by 35 million bushels to 1.305 billion bushels. This reduction was partially offset by a 70 million bushel increase in projected exports and a trim to ethanol usage. Source
The market reacted swiftly to these unexpected supply adjustments. The December CBOT corn contract, the most liquid corn benchmark, surged 3.1% to close at 397.53 US cents per bushel, compared to the previous day’s close of approximately 385.50 US cents per bushel. Source This represented a significant outperformance compared to the generally bullish consensus. The November CBOT soybean contract also saw strong gains, reaching new monthly highs driven by the significantly tighter supply outlook. Source The immediate-term structure for both corn and soybeans displayed strengthening backwardation, with rising nearby premiums reflecting the heightened demand in the face of reduced supply. Source
The impact on other commodity markets was limited, with the broader US dollar index (DXY) and US Treasury 10-year yields showing little immediate reaction as the market focused primarily on the implications of the USDA’s grain supply revisions.
Market Impact Summary:
- CBOT Corn (December): +3.1% to 397.53 USc/bushel
- CBOT Soybeans (November): New monthly highs
- Market Structure: Strengthening backwardation in both corn and soybean futures.
The USDA’s surprise revisions to the US corn and soybean supply outlooks represent a significant development, with far-reaching implications for agricultural markets. The unexpectedly tight supply situation is likely to support prices in the near term and potentially influence planting decisions for the next growing season. Further analysis is required to fully assess the long-term consequences of these changes. The data comes from the USDA WASDE report and CME price feeds via Archer Financials, and Trading Economics live pricing. Source Source
What to Watch Next
- Further USDA analysis: Examine the detailed breakdown of the USDA report for a deeper understanding of the factors contributing to the supply revisions.
- Market reaction in coming sessions: Observe how prices continue to respond to the tighter supply outlook, and consider potential ripple effects across related markets.
- Next WASDE report: Monitor the USDA’s upcoming reports for further updates on production and supply estimates.
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