Grain prices slide lower

The August World Agricultural Supply and Demand Estimate was released on Monday, Aug. 12. It was a neutral to slightly bullish report for corn and wheat but quite bearish for soybean prices.

Yield projections were increased for both corn and soybeans as the growing season thus far appears to be one for the record books. The nationwide corn yield estimate was raised from 181 to 183.1 bu/acre while the soybean yield was raised from an estimate of 52 to 53.2 bu/acre. Both yield estimates would be records if realized.

Soybean harvest acres increased 1.161 million acre (1.3%) while corn harvested acreage was reduced by 728,000 acres (0.87%).

Corn and wheat ending stocks were unchanged to slightly lower, while soybean ending stock estimates pressed higher, going from 435 million bushels to 560 million bushels from the July report to this one, the highest ending stock projection for soybeans since August of 2020 – a time when soybean prices were trading around $9/bu., right before everything changed with a demand spike across all the grain commodities and an over-estimated ending stock supply projection that started to come to light in subsequent USDA reports. The perfect storm for a historical price rally as the pump was also primed for a round of inflation across all industries.

It will be hard to argue for a historical price rally in the grain commodity space at the current juncture as most signals would indicate we are traveling in the opposite direction of where we were headed in August of 2020.