August WASDE Report Shows Bearish Corn, Tighter Livestock and Cotton Markets

The August World Agricultural Supply and Demand Estimates (WASDE) report from the USDA has delivered a mixed bag for commodity markets, with significant revisions to acreage and yield estimates that are shaking up the balance sheets for corn, soybeans, wheat, and livestock. According to Rich Nelson, from Allendale, who spoke with Farm Director KC Sheperd, this report is the first “live” one of the season, incorporating actual Farm Service Agency (FSA) acreage numbers and yield data, making its findings particularly impactful.

U.S. Wheat Production and Prices

Nelson called this a “Lightly Postive report for wheat” because the USDA “did see exports increased on this report.” U.S. wheat production is now estimated at 1.927 billion bushels, a slight decrease from the previous month. Ending stocks are projected at 869 million bushels, down from 890 million. Despite the lower supply, wheat farmgate prices are down to $5.30 per bushel from $5.40.

Winter wheat production is forecast at 1.36 billion bushels, with a U.S. average yield of 54.8 bushels per acre. This is an increase in yield from both the previous month and the previous year. Specifically, hard red winter production is up 2%, and soft red winter is up 1%. However, white winter production is down 3%.

Nelson noted that the USDA “lightly, in this case, lower production, just about 2 million.” He specified that they “added about 10 million to the prior winter wheat view, and they lowered other spring in this case by a little bit there as well.”

He explained the effect on stocks, stating, “So we had not just a lightly smaller production. We also saw exports raise, therefore stocks, 890 last month now, 869.”

Regarding acreage changes, he noted a “relatively minor” 87,000 acre revision, which “really did not change the numbers too much.”

Global Market Snapshot

Globally, wheat production is estimated at 806.9 million metric tons (mmt), a decrease from the July report. Global ending stocks also fell to 260.08 mmt. While the European Union’s production saw a slight increase, China’s production estimate was decreased, contributing to the overall global decline. Total global wheat exports were estimated at 213.53 mmt, a slight increase from July.

Corn and Soybeans

The corn market was hit with a decidedly bearish report. The USDA added a surprising 2 million acres to its prior planting estimates, along with a significant yield increase from 181 to 188.8 bushels per acre. “That helped push the ending stock number for 1.7 billion bushel last month to now, 2.1,” Nelson said, adding that “we are now firmly back into the large supply years of 2014 through 2019.” The 2 million-acre increase in corn was the largest August increase ever recorded.

In contrast, soybeans were seen as lightly bullish. The USDA dropped planted acres by 2 million, which more than offset a slight increase in yields to 53.6 bushels per acre. This resulted in a decrease in ending stocks from 310 million to 290 million. However, Nelson cautioned that there are still many questions regarding export issues, particularly with China. “Until we get a China trade deal, these new crop soybean bookings look quite concerning,” he noted, highlighting the risk of further export declines in the coming months.

Livestock and Cotton

The report brought a more bullish outlook for both the beef and pork markets. The USDA dropped its 2025 beef production estimate by over 200 million pounds and its 2026 estimate by 300 million pounds, finally “recognizing a tightening balance sheet,” according to Nelson. Beef offered to each U.S. consumer is expected to drop to 10-year lows next year. For pork, the USDA lowered its 2025 production view by over 300 million pounds, acknowledging that weekly slaughter numbers have been below expectations since July.

On the cotton front, the report was also seen as bullish. The USDA cut planted acres by about 800,000, a significant drop for a crop that typically starts with around 10 million acres. This sharp reduction, despite a yield increase to 862 pounds per acre, led to a net lowering of production. The ending stocks number dropped from 4.6 million bales to 3.6 million, putting it below last year’s level.

Political and Future Considerations

The report also touched on political factors impacting the market, primarily trade with China and the future of biofuel regulations. The USDA’s repeated reduction in soybean export estimates is a clear indicator of the market’s concern over the lack of a trade deal. Nelson also mentioned that the EPA’s final decision on waivers for small ethanol plants is a political issue that could still cause a “little small shake up in these months ahead” for corn.

Looking ahead, Nelson said the next WASDE report will incorporate more direct in-field analysis. This could provide a clearer picture of corn yields and potentially adjust them downward slightly due to concerns about “uneven pollination.” For soybeans, a further drop in export estimates remains a key concern until a trade agreement is reached with China.

To See more from Rich Nelson at Allendale, click here:

You can also view the full reports here:

— Crop Production: https://www.nass.usda.gov/…

— World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…