Historic yield, acreage changes shake markets

August 14, 2025 | Kriss Nelson

Surprises filled the U.S. Department of Agriculture’s (USDA) August World Agricultural Supply and Demand Estimates (WASDE) report, released Tuesday, with markets responding as soybean prices rallied while corn prices fell.

From an Iowa farmer’s perspective, Grant Kimberley, senior director of market development at the Iowa Soybean Association and a farmer from Maxwell, sees both positives and challenges in the report.

 “Growing corn and soybeans, there’s some good and bad with this report,” Kimberley says. “The bottom line is we need to increase demand all the way around. The biofuel industry must increase production next year, and we need a resolution to reduce trade uncertainty, including specific import purchase targets from all of our major agriculture buyers.”

Acreage shift confirmed

Jake Moline, risk management consultant with StoneX, says changes to crop yields and acreage caught many off guard.

“For those looking for a surprise, the USDA’s August WASDE release delivered,” says Moline. “Not only did the USDA make unprecedented changes to new crop yields, but they also made major planted acreage adjustments.”

USDA incorporated Farm Service Agency (FSA) data into their August balance sheets, confirming what Moline and others knew in June; that there was a big shift to corn from soybeans due to projected profitability.

This is the second time, along with last year, USDA has incorporated FSA data into the August WASDE. Although this data has historically been released in October, earlier submission of FSA administrative data by farmers and faster internal processing by the agency has made the data available sooner.

Moline said that while the wait for the August WASDE update on soybean figures feels long, it could have been longer.

“The earlier incorporation of FSA data increases market transparency and should be applauded,” he says. “It will also lead to less material changes to acreage in September and October with the next chance for material adjustments now coming in the final production report in January.”

Where did the acres shift?

Moline says at the state level, the bulk of the additional corn acreage came from the fringe areas of the corn belt. The losses to soybean acreage were more evenly spread out and consistent with only the very northern states lacking change.

Historic USDA boost

Yield was the main focus of the market heading into the August WASDE announcement, with analysts’ estimates pointed toward sizeable yield increases for both corn and soybeans.

Seventeen analysts were polled prior to the report, with one expert having corn yields estimated above 185.5 bushels per acre for the August WASDE. The insights were the result of StoneX’s customer survey. From those polled, the national soybean yield was expected to rise 0.4 bushels per acre to 52.9 from the July estimates. The national corn yield was expected to rise more than 3 bushels per acre to 184.3.

USDA decided to raise their national yield forecast to 53.6 bushels per acre for soybeans and 188.8 bushels per acre for corn.

“Through the lens of crop conditions, these yields make sense,” says Moline, adding current soybean crop condition ratings pointed at a yield 101.68% of trend or 54 bushels per acre, and current ratings would suggest a corn yield at 104.5% of trend or 190.30 bushels per acre.

Soybean’s yield increase was more than offset by the loss in planted acreage resulting in a 63 million bushel loss in production.

The loss in soybean production was partially offset by reducing export demand, limiting the drop in carryout to 30 million bushels. The USDA’s carryout/use figure dropped from 7.05% to 6.66%. No major changes were made to South American production in the August WASDE, with the sole change coming from a 1 million metric ton increase to Argentine soybean production.

The 7.8 bushels per acre jump in corn was the largest increase in modern history from the USDA’s July to August report.

“If the yield changes to production weren’t shocking enough for you, throw an unprecedented adjustment to planted acreage that resulted in corn production rising about 1 billion bushels from July,” says Moline.

The USDA expectedly increased total corn demand by over 1/2 billion bushels through increases to feed, exports and ethanol to dilute the effect on carryout. In the end, the domestic corn carryout estimate grew 457 million bushels to 2.117 billion bushels and the corresponding carryout to use ratio grew from 10.77% to 13.27%.

Soybeans show strength

The soybean market favored the August WASDE report, finishing Tuesday up 21 cents with new crop futures around $10.33.

Corn finished the day down 13 cents with new crop futures closing around $3.95.

In terms of where these prices stack up with past August carryout/use figures and new crop futures prices, Moline says soybean futures are attempting to lessen the gap with their recent price reaction, however, this gap has been present the entire marketing year.

“The market is global and other influences outside of the U.S. have presented challenges for soybean prices,” he says. “The main culprit has been South American production that continues to expand and is expected to reach record levels this year.”

Other hurdles, he added, include recent trade policy woes and concerns around global demand, particularly in China.

Corn’s current domestic carryout/use figure would correlate with an equilibrium new crop futures price just above $4.00. In contrast, soybean’s domestic carryout/use figure would point toward a new crop futures equilibrium price near $12.00.

“It’s not difficult to infer that corn is near fair value while soybeans could be deemed undervalued,” says Moline.

Future market outlook

The USDA's cut of soybean demand shows signs that demand rationing may be needed.

“If the domestic soybean carryout/use figure dips below six percent, it is statistically much more likely we see some sharper appreciation of futures prices,” says Moline.

Future adjustments to production could come from either yield or acres, trade policy and biofuel policy. Final Renewable Volume Obligation (RVO) targets and details around Renewable Identification Numbers (RIN) qualification for advanced biofuels will also have an influence on soybeans over the next year.

“As we look even further into the future, the acreage debate for next spring could look a lot different than last year,” says Moline. “Soybean futures are likely to gain ground versus corn if current trends continue and rising input costs mainly fertilizer and chemical could result in a massive swing towards soybean acreage due to projected profitability.”

Moline advises that the historic adjustments to corn made to the USDA’s balance sheet in August give clues that adjustments are likely in the future.

To put it into perspective, the USDA has raised its corn yield estimate 17 times in August in the last 32 years. The department’s January corn yield was higher than August in just five of those years, matched once, and lowered in the remaining 11 years. This throws water on the old adage, “big crops get bigger”, Moline says.

“With that being said, some additional acreage could shift to corn in the coming months, which could also come at the expense of soybean acreage,” he says. “The USDA’s adjustments to corn demand can be looked at as tools to lessen the shock to carryout. Do current grain consuming animal units justify the sharp 250 million bushel increase in corn feed demand for 25/26? No, and this will likely be the category the USDA pulls from if production were to decrease.”

Moline forecasts if the USDA lowers corn production by 100 million bushels in the next few months, that will likely result in about a 100 million bushel decrease to demand – the bulk of which is likely stolen from the “fudge factor” category of feed demand.

Protecting farm revenue

“Almost every row crop farmer in the United States is heading into this fall with a historically small percentage of their expected production forward sold or protected through physical or financial contracts,” says Moline. “These farmers have faced a historically difficult growing season, with new crop futures failing to trade above spring crop insurance prices in a single session since they were established in February.”

Moline notes that changes to crop insurance subsidy rates last year led to a surge in growers purchasing supplemental crop insurance coverage, with most opting for the Enhanced Coverage Option (ECO).

“If growers purchased ECO, there could be a case for hedging indemnity payments in corn today,” he says. “To understand and quantify these risks and opportunities, it’s important to consult with your risk management advisor, because each situation is unique.”

He adds that additional changes to subsidy rates for add-on products like the Supplemental Coverage Option (SCO) and changes to Title 1 programs give row crop farmers the tools to raise their revenue floors and protection through crop insurance next year.

“Farmers should spend time learning about these changes and how to leverage the cornerstone of their risk management plan, crop insurance, along with other risk management tools that allow them to forward sell or hedge more grain to break the cycle they’re in today,” Moline says.

“Lastly, row crop production profitability is cyclical,” he says. “We find ourselves in the middle of the ‘pain years,’ and what will set successful farms apart from their peers is how they plan and execute risk management plans.”

Written by Kriss Nelson.

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