August WASDE Analysis 08/12/2025

The August WASDE report delivered a significant shock to the corn market, revealing a much larger-than-expected supply outlook that stands in stark contrast to a surprisingly bullish soybean balance sheet. The USDA’s first survey-based yield estimates were the primary driver, boosting corn production to a new record while a sharp cut to soybean acreage tightened the oilseed’s outlook considerably. Wheat provided a quietly supportive backdrop with tightening global inventories. This divergence between overwhelmingly bearish corn data and bullish soybean figures reinforces our "Golden Grain Cycle" Stage #1 framework, suggesting prices are likely to remain in a volatile, choppy range as the market digests these conflicting fundamentals. The outlook remains subject to the whims of late-season weather, geopolitical developments, and the pace of global trade.

CORN

This was a fundamentally bearish report for corn, with the USDA increasing its 2025/26 U.S. ending stocks projection by a massive 457 million bushels to 2.1 billion. This figure blew past the average analyst estimate of 1.918 billion bushels and, if realized, would represent the highest U.S. corn stocks since the 2018/19 season. The bearish surprise was driven by the season's first survey-based yield forecast, which came in at a record 188.8 bushels per acre, boosting the production forecast by 1.0 billion bushels from last month. While the USDA did raise its export forecast by 200 million bushels and its feed and residual use by 250 million, the new demand was not nearly enough to absorb the tidal wave of new supply. The resulting U.S. stocks-to-use ratio now sits at a very comfortable 13.3%, a significant increase that will weigh on prices.

The bearish sentiment was mirrored in the global numbers, which were pulled higher by the enormous U.S. crop. Global ending stocks for 2025/26 are now projected at 282.6 million metric tons (MMT), up 10.4 MMT from July and well above trade expectations. This increase occurred despite downward revisions to foreign production, most notably in the EU and Serbia, where extreme heat and dryness during July curtailed yield prospects. This dynamic underscores that the U.S. is the primary driver of the bearish global outlook. With a global stocks-to-use ratio climbing toward 22%, the world balance sheet confirms an environment of ample supply, which continues to pose a significant headwind for corn prices.

SOYBEANS

In a stark contrast to corn, the USDA delivered a decidedly bullish report for soybeans. The 2025/26 U.S. ending stocks forecast was slashed to just 290 million bushels, well below the average trade estimate of 358 million and a sharp 40 million bushel drop from the July projection. The bullish revision was driven by a significant 2.4-million-acre reduction in the forecast for harvested area, which more than offset a 40-million-bushel cut to the export forecast. This supply-side adjustment tightens the domestic balance sheet considerably. The U.S. stocks-to-use ratio now plummets to a fundamentally supportive 6.7%, suggesting a much stronger price floor compared to corn.

The constructive tone carried over to the global balance sheet. World ending stocks for 2025/26 were lowered by 1.2 MMT to 124.9 MMT, falling below analyst expectations. This global tightening was driven almost entirely by the smaller U.S. production forecast. While the global stocks-to-use ratio of roughly 29.4% does not imply the same level of tightness as the U.S. figure, the downward revision is undeniably supportive. The market must now contend with a tightening supply picture for soybeans, which should help insulate prices from the bearish pressure emanating from the corn pit.

WHEAT

The wheat complex received modestly friendly news, though its domestic balance sheet remains heavy. U.S. ending stocks for 2025/26 were trimmed by 21 million bushels to 869 million, coming in just below the average analyst estimate. The reduction was primarily the result of a 25-million-bushel increase in the export forecast, reflecting a strong early pace of sales and shipments. Despite this incremental tightening, the U.S. stocks-to-use ratio remains at a burdensome 42.8%. This indicates that the U.S. is still awash in wheat, which will likely cap any significant upside potential for domestic futures prices.

The global story, however, offers a more compelling long-term bullish case. World ending stocks were lowered by 1.4 MMT to 260.1 MMT, a figure that marks the lowest global wheat inventory since the 2015/16 marketing year. This multi-year tightening trend is a significant fundamental development, supported this month by a 2.0-million-ton reduction in China’s production forecast. While the global stocks-to-use ratio of 32.1% is not yet at a critical level, the persistent erosion of global supplies continues to provide a solid pillar of underlying support for the wheat market, even if the burdensome U.S. supply picture limits near-term enthusiasm.