Corn and Soybean Markets React to USDA Data with 'Sell the Rumor, Buy the Fact'

Corn and Soybean Markets Rally on Strong USDA Reports

Before the release of the monthly USDA supply and demand report, traders in the corn and soybean markets were hoping that large U.S. crops had already been priced into futures contracts. It seems their expectations were met. On Friday, December corn rose by 10 1/4 cents to $4.30 per bushel, reaching a seven-week high. For the week, corn prices increased by 12 cents. Similarly, November soybeans gained 12 3/4 cents on Friday, closing at $10.46 1/4 per bushel, marking a weekly gain of 19 1/4 cents. Both markets closed at technically bullish weekly highs.

The USDA released its updated production estimates for corn and soybeans on Friday, showing higher figures than expected. The agency estimated U.S. corn production at 16.814 billion bushels, surpassing the trade’s forecast of 16.502 billion bushels. This represents an increase of 72 million bushels from the previous month. The average corn yield was slightly reduced to 186.7 bushels per acre. For soybeans, the USDA projected a production of 4.301 billion bushels, exceeding the trade’s expectation of 4.262 billion bushels. The estimate was raised by 8.5 million bushels from last month, with an average yield of 53.5 bushels per acre.

This data led to a classic “sell the rumor, buy the fact” scenario in the grain markets. Despite the positive outlook for crop production, corn and soybean prices surged as traders anticipated strong demand and favorable market conditions.

Key Challenges for Corn and Soybean Bulls

For the corn and soybean bulls, the coming week will be critical. Demonstrating strong follow-through buying is essential to confirm that seasonal market bottoms are in place and that prices could begin to trend higher, particularly for soybeans. Sustaining these price uptrends during the early fall will be challenging due to increasing harvest pressure and commercial hedge selling. However, the resilience shown by the corn market recently suggests that it may continue to hold up despite the looming harvest.

The soybean market may also show similar strength if global demand improves. Export sales for U.S. corn have remained solid, with recent reports indicating strong demand from Mexico and other international buyers. New trade deals could further boost global interest in U.S. corn exports. However, the soybean market still needs stronger international demand, especially from China, which remains a key player in the global soybean trade.

Weather Conditions and Crop Development

Weather forecasts for the Midwest indicate mostly light and infrequent rain over the next two weeks, allowing for steady crop maturation and harvesting. While some areas may see minor declines in yields, most crops are too advanced to experience significant yield losses at this stage of the season. Temperatures in the region are expected to remain warmer than normal, which could benefit crop development.

Winter Wheat Markets Benefit from Corn and Soybean Gains

Winter wheat futures markets saw gains on Friday, following the rallies in corn and soybean prices. December soft red winter wheat futures rose by 4 1/4 cents, while December hard red winter wheat futures increased by 9 1/2 cents for the week. Short covering played a role in the price increases, and traders expect wheat markets to continue following the lead set by corn and soybean futures.

USDA Data for Wheat

The USDA also released its latest estimates for wheat, cutting the 2025-26 carryover by 25 million bushels. No changes were made to the supply side of the balance sheet, but export estimates were adjusted upward to 900 million bushels. The national average on-farm cash wheat price for 2025-26 was set at $5.10 per bushel, down 20 cents from the previous month.

U.S. wheat export sales for 2025-26 were reported at 305,400 MT, falling below expectations and highlighting the need for improved export performance. Traders are hopeful that new trade agreements will lead to increased purchases of U.S. wheat.

Looking Ahead

As the grain markets move forward, continued focus on export demand, weather conditions, and global trade developments will shape price trends. Investors and traders are closely watching for signs of sustained strength in both corn and soybean markets, as well as potential improvements in wheat exports.