At 11 a.m. CDT on Wednesday, Aug. 12, USDA will be back with its World Agricultural Supply and Demand Estimates (WASDE) report, giving its latest take on yield and crop forecasts ahead of the U.S. harvest in just a couple months.

CORN

During the first three weeks of July, the December corn contract rallied more than 50 cents as hot and dry conditions across the U.S. prompted concerns for pollinating crops. However, the market has now removed part of that weather-related price premium, with rainfall rapidly improving through late July and early August. Still, crop conditions for the U.S. crop have declined in recent USDA updates, any trader will be interested to see if USDA shows a dampened optimism for production potential in Wednesday's WASDE.

The average trade guess, according to the monthly Dow Jones survey, is calling for a 182.5 bushel per acre (bpa) national corn yield, a 0.5-bpa cut from July if realized. Bear in mind that Wednesday's forecast from USDA is the first to incorporate survey results into the estimate. Since 2000, USDA has increased their yield forecast in the August WASDE in 15 of 26 reports. Based on this year's 62% good-to-excellent crop rating to begin August, history is mixed, but a slight cut to yield prospects would not be unheard of and, to me, is a fair assumption given the Western Corn Belt dryness through July. Assuming acreage goes unchanged, an 182.5-bpa yield would suggest a 15.950 billion bushel (bb) corn crop, the second largest on record behind last year.

At that level of production, a supply issue is still difficult to picture for the U.S. market, but that will also depend on potential changes to the amount of corn being carried into the new season beginning on Sept. 1. In this regard, I imagine the Sept. 30 stocks report will be much more informative, but Wednesday's WASDE may shuffle the numbers to some degree. Exports jump to mind for one category to watch, with U.S. corn shipments entering August running 25% ahead of the same point in 2025 with one month to go in the marketing year and USDA forecasting a 16% year-over-year increase to corn exports as of the July WASDE. The average trade guess for Wednesday calls for a 10 million bushel (mb) cut to 2025-26 corn ending stocks to 2.010 bb. My hunch would be that any increase to exports could possibly be offset with a reduction to feed and residual usage.

In world corn news, all eyes will be on the relationship of Black Sea exports and E.U. imports. In their early August report, the USDA attache in Ukraine lowered the forecast for 2026-27 corn exports by 9 million metric tons (mmt) (350 mb) to just 14 mmt for the upcoming crop year. Meanwhile, the European corn crop is expected to be historically poor after a summer of persistent heat and drought, and the E.U. will likely be expected to import more corn to meet those needs. In that regard, it will be interesting to see how the world changes inform USDA's outlook for next year's U.S. exports, which may be supported despite a slower sales pace in the last few weeks as compared to summer of 2025. The Dow Jones survey is calling for 273.4 mmt of world corn ending stocks for the 2026-27 season, though it will be important to look at trade dynamics rather than strictly stockpiles, which can be misleading by themselves.

SOYBEANS

If you are interested in a textbook example of weather market volatility, look no further than the soybean market through the month of July. After rallying over a dollar per bushel on the November contract through the first three weeks of July, the market has given over 75 cents of that value back with August pod-filling weather forecasts looking much improved recently from what had been the case in mid to late July. The soybean market continues to be a tug of war between strong demand and production potential and Wednesday's WASDE will offer insights into both sides of the balance sheet.

Beginning with the yield discussion, the burning question is whether hot and dry periods in July will limit the potential for a record-tying 53 bpa trendline output in 2026, which, in my opinion, is already a borderline bullish yield barring an increase to acreage. Despite some problem areas through the U.S. Soybean Belt, the national crop enters August rated in 63% good-to-excellent condition (78% and 75% in Iowa and Minnesota, respectively). Historically speaking, USDA has raised the soybean yield forecast in seven of the past 10 years. I could really see the August yield forecast going either way on Wednesday, with August weather for pod fill set to be the determining factor moving ahead. The Dow Jones survey seems to agree with an average trade estimate of 52.9 bpa and estimates ranging from 52 to 53.5 bpa. Assuming acreage is unchanged, a drop in yield on Wednesday would likely also drop 2026 production from record territory (4.465 bb in 2021).

On the demand side of the sheet, with old-crop export commitments entering the final month of the 2025-26 year almost 13 mb ahead of USDA's goal, the argument can be made for another higher revision. The average Dow Jones guess is for a slight reduction in old-crop U.S. stocks to 324 mb. While lower carry-in and potentially lower production would reduce stocks for the upcoming 2026-27 season as well, there is also the case for higher new-crop exports given the strong July for new-crop sales. Entering August, new-crop commitments totaled 308 mb, more than double the same point in 2025, with USDA thus far forecasting a 9% year-over-year increase.

Given the time of year, the world soybean situation is unlikely to surprise in Wednesday's report. Analysts are expecting fractional increases to world stocks for both the 2025-26 and 2026-27 seasons. Some fine-tuning to South American balance sheets may be possible, but this time around, U.S. changes are likely to inform the world balance sheet with harvest just around the corner for the world's second-largest crop of soybeans.

WHEAT

Since the last WASDE report in mid-July, September Kansas City futures raced over a dollar per bushel higher at one point, into the upper $7.00 range and fueled by escalation in the war in the Black Sea, which has brought wheat exports from the region to a crawl. Since late July, the market has turned lower as traders still appear uncertain of how world supplies and trade will shift in response to logistical limitations for the world's top exporting region. In this sense, traders will be interested to see USDA's ideas of how the next marketing year may play out.

However, beginning with the U.S. market, USDA will touch up their estimates for the historically small winter wheat crop -- likely over 90% harvested across the nation at this point. USDA will also take a look into the upcoming spring wheat crop with harvest just getting started in the Northern U.S. Once again, both varieties are expected to see lower production estimates as compared to a month ago, with the Dow Jones survey calling for the total U.S. wheat crop to fall to 1.527 bb, still the smallest U.S. output since 1970. On the demand side, USDA may take a look at exports, with commitments through the first two months of the 2026-27 marketing year now running 30% behind the same point in 2025. Regardless, the average trade guess for Wednesday sees U.S. wheat stocks falling slightly from the 722 mb estimate in July.

Given the circumstances of the past month, the world balance sheets on Wednesday will likely receive the most fanfare among wheat data released in the report. Analysts expect the report to show a slight reduction in world wheat stocks, but the stocks number itself may not tell the whole story. In my opinion, the crucial numbers to watch on Wednesday are exports among the major exporters for reshuffling on lower Black Sea availability, as well as demand and imports among major importers for signs of demand rationing amid sharply higher prices through July. For some clue of what USDA may be thinking, in this month's quarterly Grain and Feed update from the USDA attache in Ukraine, the post lowered their 2026-27 forecast for Ukrainian wheat exports by 25% to 10.8 mmt. However, in a report the week before, the European Union attache did not see any increased wheat exports for that region. This leaves a big question mark looming over the market of where the supply will come from should demand among importers remain record strong as had been expected prior to the disruption in the Black Sea.

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Join us for DTN's post-report webinar at 12:30 p.m. CDT on Wednesday, August 12, as we discuss USDA's new estimates in light of recent market events. Questions are welcome, and registrants will receive a replay link for viewing at their convenience. Register here for Wednesday's USDA WASDE webinar: https://www.dtn.com/…

Rhett Montgomery can be reached at rhett.montgomery@dtn.com

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