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Aug 14, 2025
A surprise acreage cut puts soybean prices on the upswing
By Jacquie Holland, ASA Economist
Key points in this article:
While the bears came for corn in the August WASDE report, soybeans enjoyed bullish price action following USDA’s report release.
The August 2025 WASDE and Crop Production reports provided markets with a first look at farmer-surveyed yield prospects for soybeans and corn. USDA’s National Agricultural Statistics Service also utilized satellite imagery and Farm Service Agency certified acreage data to determine yield and acreage estimates ahead of major harvest activities beginning later this month.
USDA found farmers will harvest 80.1 million acres of soybeans in 2025, down a surprising 2.4 million acres from the previous estimate of 82.5 million, and resulting in the smallest U.S. soybean acreage since 2019. Pre-report market estimates were anticipating slightly more acres on average, which caused market upheaval when USDA’s forecast came in 2.2 million acres less than the smallest analyst forecast.
The missing acreage dwarfed market impacts from record yield forecasts. Favorable growing conditions across the Heartland this summer led USDA to boost 2025 U.S. soybean yield forecasts over a bushel above the trendline yield to 53.6 bushels per acre. If realized, that figure would top the previous record of 51.9 bpa set in 2016 as the largest soybean yield in U.S. history.
From a production standpoint, the surprise acreage cut more than offset any price impacts from the historic yield. The 2025 U.S. soybean crop was updated to 4.292 billion bushels, down a percentage point from the July forecast of 4.335 billion bushels. If realized, the 2025 U.S. soybean crop will drop from being the fifth largest on record to become the country’s sixth largest harvest in history.
Price windfall?
Markets had been expecting an average crop size of 4.368 billion bushels, an increase from the July estimate, so when USDA released a smaller production figure on the lower range of pre-report analyst estimates, the markets responded in force.
New crop November 2025 futures prices, which started Tuesday’s trading session at a loss, bounced up from $9.96/bu. to $10.335/bu. in less than a half hour after the report was released. At last glance, the contract was slated to close the trading day $0.21/bu. (2%) higher at $10.3225/bu.
Because of the smaller soybean crop expected to be harvested this fall and higher than expected summer crush and export consumption, USDA was forced to reduce 2025/26 U.S. export volume forecasts by 40 million bushels to 1.705 billion bushels to reconcile usage rates against reduced supply availability.
Domestic balance sheet revisions
Summer crush and export volumes have been running slightly higher than previously expected, leading USDA to increase 2024/25 U.S. soybean crushing and export usage estimates by 10 million bushels each, pushing those volumes to 2.43 billion and 1.875 billion bushels, respectively. USDA also swapped 2 million bushels of 2024/25 seed usage and added it to the residual category.
The revisions tightened the 2024/25 U.S. soybean ending stocks volume by 20 million bushels to 330 million, dropping the stocks-to-use ratio from 8% to 7.5%. Despite the tighter balance sheet, USDA left average farm prices in 2024/25 at $10.00/bu.
Between the smaller 2024/25 ending stocks and 2025 harvest, USDA took 63 million bushels out of 2025/26 supplies. While exports bore the brunt of the increased supply scarcity, USDA also trimmed new crop residual usage estimates by 3 million bushels to 34 million.
The supply and usage cuts resulted in 2025/26 U.S. soybean ending stocks falling 20 million bushels from previous estimates to 290 million, tightening the stocks-to-use ratio from 7.1% to 6.7%. Similar to the old crop balance sheet, USDA left 2025/26 average farm prices unchanged at $10.10/bu.
Global soybean balance sheet updates
USDA left production numbers for Brazil unchanged for both the old and new crop balance sheets but did increase Argentina’s 2024/25 production by 1 million metric tonnes to 50.9 MMT, as well as adding 0.8 MMT to Argentina’s 2025/26 export volumes for a total of 5.8 MMT.
USDA cited higher crush volumes in the U.S., Argentina and Egypt this summer, which pushed 2024/25 global crush volumes higher. Uruguay and U.S. soybean exports were also modified slightly higher for the 2024/25 marketing year, which paved the way for an uptick in import volumes for Argentina, Egypt and Turkey. The higher import volumes fractionally increased global ending stocks to 125.19 MMT for 2024/25.
Globally, the smaller U.S. harvest expected in 2025 and reduced imports from the European Union, Iran and Vietnam will tighten the global soybean balance sheet. Despite minor adjustments to Argentina’s trade, the cuts to the U.S. soybean crop in 2025 were the primary driver of USDA’s 1.2 MMT reduction to 2025/26 global ending stocks, which landed just below trade expectations at 124.9 MMT.
Soybean oil shakeups miss out on pricing opportunities
Soybean oil futures pared back pre-report losses following the August WASDE release to close Tuesday’s trading session relatively flat. The nearby September 2025 futures contract lost $0.0003/lb. after the dust settled to $0.5316/lb.
Soy markets traded lower prior to the report’s release due to a selloff of canola futures due to China slapping anti-dumping duties on Canada. Soybean oil took a hit on the threat of competition from Canadian canola oil imports for U.S. renewable diesel producers. A 2% drop in heating oil futures prices also weighed heavily on the soybean oil complex on Tuesday.
However, the reduced U.S. soybean production estimate for 2025 staved off further price losses, allowing soybean oil futures prices to close only fractionally different than the opening price.
USDA made significant changes to the 2024/25 U.S. soybean oil balance sheet, adding 175 million pounds to annual production while shaving off 25 million pounds of import volumes. In total, the changes added 150 million pounds to old crop soybean oil supplies.
While both 2024/25 and 2025/26 soybean oil volumes consumed for biofuels were left unchanged from July estimates, much to the market’s chagrin, USDA increased 2024/25 food, feed and other soybean oil usage by 150 million pounds. Export volumes, which have been running at high volumes through June, cooled in July and resulted in USDA cutting 50 million pounds from its 2024/25 soybean oil export projections.
While 2024/25 ending stocks grew by 50 million pounds to 1.501 billion, the uptick in food, feed and other industrial usage led USDA to increase the 2024/25 soybean oil price by a penny to $0.4750/lb.
The 2025/25 soybean oil balance sheet was largely unchanged, with the exception of the 50-million-pound increase to beginning stocks which trickled through the balance sheet to increase ending stocks by the same volume. USDA left 2025/26 soybean oil prices unchanged at $0.53/lb.
But despite the initial disappointment of no biofuel-related adjustments, the increased soybean oil usage rates at play in other areas of the agricultural economy convinced soybean oil futures prices to pare back losses, making the August WASDE a relatively uneventful report for soybean oil.
Soymeal prices face mixed WASDE reactions
On the surface, market watchers would be inclined to think the August WASDE was bullish for soymeal futures prices. It certainly appeared that way after September 2025 soymeal futures prices rose to a seven-week high following the WASDE release, but there was more to the price action than meets the eye.
The markets shrugged off USDA’s 2024/25 soymeal production increase of 500,000 short tons after export volumes were reported 500,000 short tons higher. And the selloff in canola prices, which pushed soybean oil prices lower, also reduced soy crush prospects, limiting soybean meal supply expectations in an era of surplus inventories.
Nearby September 2025 soymeal futures prices closed Tuesday’s trading session $0.6/ton (0.2%) higher to $281.4/ton. The closing price maintained a seven-week high for soymeal prices, but it had less to do with the WASDE and more to do with physical markets.
Cash prices for soymeal trended higher on Tuesday as slow crush volumes due to seasonal plant downtimes limited supplies. Export buyers in the Gulf also added upward pressure to soymeal prices on Tuesday, supporting increased cash bids at terminals further upstream.
USDA trimmed 2024/25 average soymeal prices by $5/ton to $295/ton and 2025/26 average prices by $10/ton to $280/ton as the supply forecast for soymeal remains plentiful. In the short run, the cash market is dominating price movement for the soymeal complex. But as a new crop comes online in the coming weeks and crush volumes ramp up to compete with seasonal export demand, excess soymeal supplies will need to find a home to maintain Tuesday’s price gains.
