Higher Yields, Bigger Stocks, Lower Outlook

It can be said in the grain business that we're only as good as the last story. Prices are generally driven by the last piece of paper or report that a trader has in his or her’s hand.

We'll now see what today's report does to the market over the next 30 days because the USDA delivered a very bearish October Supply and Demand Report. Ten days ago, the Quarterly Stocks Report was already bearish for corn, showing higher ending stocks for the 2025 production year. In both 2023 and 2024, that report surprised the market with lower stocks and provided some optimism. This year, we knew those higher stocks would find their way into today's report and hoped that would be the worst of it.

The USDA had other plans. In addition to larger stocks, it raised corn yield well above the average trade estimate, boosting production and pushing already burdensome ending stocks even higher.

CORN

The USDA pegged the U.S. corn yield at 181.2 bushels per acre, well above both the average trade estimate of 177.7 bpa and September's estimate of 178.5 bpa.

As a result, production increased to 16.034 billion bushels versus the trade estimate of 15.721 billion and September's 15.800 billion. Ending stocks came in at 1.849 billion bushels compared to the trade estimate of 1.670 billion and September's 1.567 billion. The result was a decisively bearish report for corn.

In South America, the USDA raised Argentina's old-crop corn production from 63 to 64 million tonnes while leaving new-crop production unchanged at 55 million tonnes. Brazilian corn production was unchanged at 141 million tonnes for old crop and 139 million tonnes for new crop.

World corn stocks were bearish as well, coming in at 280.44 million tonnes versus the trade estimate of 273.78 million and September's 272.10 million. All in all, it was a tough day for corn prices.

BOTTOM LINE: We may have missed our window for some of the better harvest delivery corn prices. The September 30 Quarterly Stocks Report was an early wake-up call that lower prices were likely ahead. That said, the crop is not in the bin yet, and final yields won't be confirmed until January. There's still hope that China steps in as a buyer, something many believe the funds are counting on. The risk, however, is what happens if those same funds decide it's time to head for the exits. 

SOYBEANS

The USDA also came in slightly above expectations on soybeans. U.S. soybean yield was raised to 53.1 bpa, compared to both the trade estimate and September estimate of 52.8 bpa.

Production was essentially unchanged at 4.534 billion bushels, matching trade expectations and remaining in line with September's estimate. Ending stocks were raised to 315 million bushels versus the trade estimate of 305 million and September's 310 million.

The USDA lowered Argentina's old-crop soybean production slightly from 49.5 to 49.3 million tonnes while leaving new-crop production unchanged at 50 million tonnes. Brazilian production was also unchanged at 180.5 million tonnes for old crop and 186 million tonnes for new crop.

While the numbers were not friendly, they were not nearly as burdensome as corn. The soybean market has stronger demand support than many expected.

BOTTOM LINE: Soybeans remain at attractive pricing levels despite today'slosses. Many growers are seeing some of the best yields in years, helpingoffset weaker futures. An ending stocks number of 315 million bushels ismanageable given strong domestic crush demand and biodiesel usage.

At this time last year, China had not purchased North American soybeans. This year, they have already purchased more than 10 million tonnes from the U.S. Soybeans could certainly recover from today's setback, but don't get caught speculating. We are still looking at profitable opportunities.

WHEAT

Wheat did not escape today's pressure.

U.S. wheat ending stocks came in at 740 million bushels, above both the trade estimate of 721 million and September's estimate of 717 million bushels. World wheat ending stocks were reported at 276.04 million tonnes, essentially unchanged from expectations and slightly below September's 276.29 million tonnes.

Unfortunately, wheat was dragged lower by both the bearish corn report and larger-than-expected U.S. wheat stocks. Recent support from ongoing tensions in the Black Sea region has helped keep a floor under the market, but that story can only take prices so far.

BOTTOM LINE: Wheat took a hit today alongside corn and soybeans. Whileexports from Russia and Ukraine continue to face disruptions, the wheat isstill there waiting to move once conditions improve. If you're planting newcrop wheat, consider making some sales or at least placing offers. Pricesaren't what they were two months ago, but they're still stronger than whatwe've seen through much of the past three years.

THE TAKEAWAY

Today's report was a reminder that supply still matters. Corn took the biggest hit as higher yields and larger stocks shifted the outlook lower, while soybeans continue to benefit from stronger demand and wheat remains caught in the middle. As harvest progresses, the focus will now turn to final yields, export demand, and whether funds continue to support the market or head for the sidelines.

Read the full October WASDE Report