August WASDE Signals Big Crops and Tighter Farm Margins

Field data lifts yields while high costs pressure profits

USDA’s August World Agricultural Supply and Demand Estimates (WASDE) introduces the first field-based yield projections for 2025/26, shaping market expectations for harvest. Corn leads the update: yield is pegged at 188.8 bushels per acre, a record pace, alongside higher harvested area. Production is now forecast at 16.7 billion bushels. Use rises for feed, ethanol, and exports, but supply gains outstrip demand, lifting ending stocks to 2.1 billion bushels. The season-average price is trimmed to $3.90 per bushel, and December 2025 futures slipped below $4 after the report.

Soybeans show a mixed picture. Yield rises to 53.6 bushels per acre, but harvested area falls to 80.1 million acres. Production is estimated at 4.3 billion bushels, slightly below last month and under last year. Exports are reduced to 1.7 billion bushels, with ending stocks at 290 million. The season-average price holds at $10.10, and November futures firmed following the release.

Wheat edges higher on yield to 52.7 bushels per acre, yet production is set at 1.93 billion bushels on lower area. Domestic use is trimmed, exports are raised to 875 million bushels, and ending stocks are projected at 869 million. The season-average farm price eases to $5.30, and Chicago futures posted new cycle lows.

Other crops are mixed. Rice output increases to 208.5 million cwt with tighter ending stocks and a $14.20/cwt price. Cotton production declines to 13.2 million bales, lowering stocks and supporting a 64-cent price. Sugar supplies improve, pushing the stocks-to-use ratio to 17.75%.

Costs remain a key headwind. USDA reports the crop Prices Received Index up 9.2% year over year, while the Prices Paid Index rises 7.1%. Farm production expenses total $477.6 billion for 2024, just below 2023’s record but still elevated. Regional spending is led by the Midwest, followed by the Plains and West. With ample supplies, softer prices, and high inputs, producers face tight break-evens. Risk management and prudent marketing will be essential into harvest.