USDA report days always have their share of confusion, and the agency’s website crashing just as big acreage and grain stocks came out didn’t make Friday’s data dump any less chaotic. But futures markets kept on trading, providing a real-time evaluation of what the reports said.

Corn slumped to double digit losses. Soybeans tried to rally only to quickly lose momentum, suggesting bearish corn data put the breaks on friendlier numbers for the oilseed. Grain markets are rarely a zero-sum game, but the reactions were an apt summary of where futures stand as trading ahead of the July 4 holiday begins.

USDA gave corn a double whammy of negative news. June 1 inventories were at the high end of the trade’s guess, coming in around 115 million bushels above expectations. That means more corn should be on hand at the start of the new crop marketing year Sept. 1. Additionally, More 2024 acres than farmers planned for in March translates into greater supplies when the new crop year is over at the end of August 2025

Old crop soybean inventories were a little less than the average trade guess and acreage came in some 1.3 million less than expectations. That should cause new crop soybean carryout to tighten considerably from the government’s last estimate, which should lead to higher prices. But markets like to throw the baby out with the bathwater. With financial markets experiencing their own turmoil, the path of least resistance was down, leaving grains on their back foot.

So what does it mean? Maybe a lot. Maybe nothing. Weather over the next couple of months could flip these scenarios quickly, but here’s what to noodle while waiting on those forecasts.

Too much corn

The government said farmers planted nearly 91.5 million acres of corn this spring, down from the 94.6 million put in a year ago but still up 1.6% from March intentions. Using USDA’s June yield estimate of 181 bushels per acre, this would produce a crop of 15.1 billion bushels, the third largest on record.

Grain stocks are a little trickier to interpret at just under 5 billion bushels. Exports and usage by ethanol plants and other processors are fairly well known. The wild card is feed usage, and the most stocks since 2019-2020 implies that less corn walked off the farm. If that trend is true and holds during the summer, it’s a tell that total livestock demand for the 2023 marketing year could be around 275 million less than USDA forecasts. If it doesn’t reverse, this not only affects old crop prices but has negative implications for the coming year.

Lower prices in theory stimulate demand, or at least remove one barrier to it. That dynamic could take months to prove itself and markets are nothing if not impatient. Little wonder December futures closed near three-year lows, settling at $4.2075 to close out trading for June.

Even if demand turns around modestly, year-end stocks on Aug. 31, 2025, could hit 2.2 billion bushels – plenty. Average cash prices received by farmers in that environment could drop all the way to $3.65 – a far cry from the $4.40 USDA printed in its June World Agricultural Supply And Demand Estates. This lower price translates into a projected selling range of $4.25 to $4.55 at some point during the upcoming marketing year. March 2025 futures for delivery midway through the marketing year closed at $4.3575 Friday, so the market by one measure is already there. For now, at least.

Forecasts out Friday afternoon after the close did turn a little more bullish, with a warm and wet #6- to 10-day outlook giving way to somewhat  drier conditions in the 8- to 14-day and three-four week forecasts. That could be sign of a turn, but the maps can flip by the time fireworks start popping this week.

Soybean struggles

If more corn means lower corn prices, tighter soybean stocks should lead prices in the other direction if skeptical markets can prove their independence. That’s a big “if,” but soybeans are soybeans.

Lower than expected June 1 soybean inventories of 730 million bushels could be due to statistical error present in any survey. But it could also hint at slightly lower 2023 production than USDA estimated way back in January. (The agency may not update that number until September, when the market will consider it ancient history.) Fewer acres planted in 2024 could whittle these stocks, though acreage will get plenty of updates along the way – nearly 13 million acres were left to be planted according to Friday’s report

If USDA’s demand assumptions for the upcoming marketing year hold, projected carryout Sept. 1, 2025, would be down some 135 million bushels, enough to lift the average cash price for the crop to $12 and the projected futures selling range from $14.70 to $15.80. November futures ended June at $11.04, so that forecast is a pipe dream right now.

Whether it stays pie-in-the-sky could hinge on more than weather. There’s the election, for starters. For all the rhetoric and in the wake of Thursday’s debate, traders don’t really see much difference between the economic policies of Trump and Biden. Chinese resistance to more tariffs could trigger retaliation against soybeans, especially if Brazil gears up for a big crop. No one has a good crystal ball on that one, though bears suffer trade war déjà vu.

Hours before USDA’s computer woes on Friday, the favorite inflation metric of the Federal Reserve, Personal Consumption Expenditures, or PCE, came in for May at 2.6%, as expected, down slightly from March and April. But investors see myriad bogey men, from a return of inflation, or a recession or the impact of a strong dollar, to name three.

So, Wall Street remains just as muddled as the grain market. It’s a new month, and more of the same old same old.