US and the World

Here we are it is the middle of August and in most years the crop is made. At this time of year much of the crop defining weather is behind us. Corn pollination is in the rear-view mirror but pod set in soybeans can be the real deal in August. It’s been a pretty good year for the US corn belt with good weather almost from the beginning. So far, even the summertime weather has been kind. On August the 12th the USDA weighed in with their latest WASDE report.

In many respects, it was a shocker. It came in corn with the USDA predicting a whopping 16.7-billion-bushel corn crop with record yields projected at 188.8 bushels per acre. This would shatter the previous record and it was a good seven plus bushels above last month estimate. The previous corn record production was in 2023/2024 at 15.34 billion bushels. This planted acreage was increased by 2.1 million acres to 97.3 million acres. The harvested acres are projected at 88.7 million acres up 1.9 million from the July estimate. Crop corn ending stocks was boosted 457 million bushels to 2.117 billion bushels.

The USDA prediction on corn was a big surprise and to some extent the soybean estimate was as well. However, it was a surprise on the bullish side. USDA came out and predicted 4.29 billion bushels of soybeans which was at the low end of pre report estimates. This was based on a national average yield of 53.6 bushels per acre which would be a record high that came about. However, USDA reduced harvested acreage from 82.5 million acres to 80.1 million acres. This means that we actually have declining ending stocks on the new crop side of 290 million bushels, 20 million bushels lower than a month ago. The USDA also cut back on world ending stocks 124.9 MMTs, a decline at 1.17 MMTs from last month.

On Aug 15th corn and wheat futures were lower than the last Market Trends report. Soybean futures were higher. September 2025 corn futures was at $3.83 a bushel. Dec 2025 corn were at $4.05 bu. The November 2025 soybean futures was at $10.42 bu. The September 2025 wheat futures closed at $5.06 a bushel. The Minneapolis September 2025 wheat futures closed at $5.70 a bushel with the September 2026 contract closing at $6.42 a bushel.

The nearby oil futures as of Aug 15th closed at $62.80/barrel down vs the nearby futures recorded in the last Market Trends report of $64.87/barrel. The average price for US ethanol in the US was $2.05/gallon, the same as the $2.05/gallon recorded in the last Market Trends Report.

The Canadian dollar noon rate on August 15th, 2025, was .7243 US, lower vs the .7334 US reported here in the last Market Trends report. The Bank of Canada‘s lending rate remained at 2.75%.

Ontario

In Ontario there is a mixed bag with regard to the crop growing in the field. Although much of the province got off to a good start dry weather and drought has inundated many parts of Ontario. Areas in central, western and eastern Ontario and the Niagara region have been and are suffering from drought conditions. There has been some relief to these areas with recent rainfall, but the damage has been done. On the contrary the deep southwest of the province has had ideal conditions with good moisture almost all year. This will incubate many basis pricing opportunities within the province over the next few months.

Basis levels for corn have increased substantially over the last few weeks and especially in eastern Ontario. It is always a balancing act with regard to how much corn is needed and how much is exported and how much is available in Ontario each year. Of course, it is August now and lots of old crop corn has left the building. Pricing opportunities for those who have corn left are quite good compared to the southwestern part of the province. The Canadian dollar continues to stimulate these cash prices.

Soybean basis levels have moved up reflecting the higher futures prices. Clearly, with the drought in many parts of Ontario corn supply moving forward might be compromised. This could result in big basis opportunities for pricing in the next few months. However, it could also result in increased US imports of corn to keep prices low. It has been a few years since we’ve had this situation. Much will depend on the final yield of the 2025 corn crop. Keep in mind in the Deep Southwest of Ontario the corn crop is good, and this is where the majority of corn volume wise is grown in the province.

Old crop corn basis levels are $1.80 to $2.53 over the September 2025 corn futures on August 15th across the province. New crop corn basis levels were $1.20 to $1.62 over Dec 2025 futures. The old crop basis levels for soybeans range from $2.95 to $3.05 over the November 2025 futures. New crop soybeans range from $2.85 to $3.05 over the November 2025 futures. Ontario SRW wheat prices are approximately $5.87. For July 2026 new crop the bid is in the $6.64 bu. range. On August 15th the US replacement price for corn was $6.40/bushel. You can access all these Ontario grain prices in the marketing section at https://gfo.ca/marketing/daily-commodity-report/

The Bottom Line

We have a record crop to deal with. It is almost getting to be what they used to call a broken record, continually playing the same song. Over the last couple of years, we’ve got so accustomed to huge crops in the United States and its blunting effect on higher prices. However, this year on August 12 to USDA came out with the earth-shattering number of 188.8 bushels per acre of corn it redefined huge crop. Yes, skeptics will scoff at that number, but regardless there is a lot of corn in the field in the United States.

Needless to say, December futures fluttering just above the $4.00 mark don’t lie. However, it’s pretty obvious that our American friends will have to put that big crop somewhere. Storage will be at a premium, surely some of it will be bagged in the field. There will be piles everywhere. There is also lots of on farm 2024 corn left. This will likely manifest itself at harvest time in lower prices and basis levels unless those combine yield stories tell a different tale. This might be one of those years.

Do soybeans offer a much better story looking ahead? At first glance it would seem so based on the lower harvested acres the USDA estimated. Yes, they did put out a record yield at 53.6 bushels per acre but there was a cut of 2.4 million acres. That is significant and if that yield estimate changes on a hot and dry time over the next three weeks ending stocks will grow smaller. This could set up an opportunity for a rally in soybeans.

China could be a wild card in this scenario. However, we must be realistic. President Trump has called for China to quadruple their soybean buying from the United States this year. Quadrupling zero buying it is still zero buying as the Chinese have not been part of this soybean market. As we look ahead, we’re almost getting beyond that to save the day. They prefer buying all agricultural commodities without any geopolitical strings attached. Look for them to always buy soybeans from Brazil as their preferred option.

Commodity Specific Comments

Corn

The 188.8 bushel per acre corn yield was almost on the crazy side. The question is going forward is this the high watermark for corn yield for the 2025 crop. When it was announced corn was down hard on the day but by the end of the week September corn actually gained a penny. To some extent that tells us that the yield was dialed in but on the other hand not believed by traders.

Where corn ends up nobody knows but clearly, we have a huge crop and we need some type of new demand or fresh news to get this market going again. There had been talk about tassel wrap and pollination issues. However, that was lost in the avalanche of supply coming from USDA last week. Corn exports to places like China would certainly be optimal in the next few weeks as there is still quite a bit of old crop in the pipeline.

The September 2025 corn contract is currently priced at 21.5 cents lower than the December 2025 contract a bearish indication of old crop corn demand. Seasonally, we know that corn prices tend to peak in early June and bottom out in early October. The December 2025 corn futures contract is at the 13th percentile of the past five-year price distribution range.

Soybeans

Do soybeans represent hope in this market and corn just the opposite? Well, we know soybeans are the great liars but always in the end tell the truth. There was a huge cut in the amount of soybean acres which helped boost this market even at a record deal prediction of 53.6 bushels per acre. It is entirely obvious if we go hot and dry for the next three weeks that yield prediction will be cut, giving hope for soybean prices.

Technically, it’s hard to tell whether we’re at a turning point for the soybean market. Soybeans have been bearish at least up to this point and there’s still an argument that they still are. Market act...