POLICY  •  NEWS  •  MARKETS

AG POLICY & MARKETS DAILY

WEDNESDAY, AUGUST 12, 2026   |   SPECIAL REPORT & ANALYSIS

SPECIAL REPORT  |  AUGUST CROP PRODUCTION & WASDE

USDA Finds More Acres but Lower Yields in High-Stakes August Reset

Sorghum plunges; corn stocks tighten while soy and rice supplies grow

Analysis  ·  August 12, 2026

USDA’s Aug. 12 Crop Production (link) and World Agricultural Supply and Demand Estimates (WASDE) (link) reports delivered a much more complicated message than the headline production figures suggest. The department found substantially more corn and soybean acreage than the trade expected, but paired those increases with lower survey-based yields. The result was a 16.013-billion-bushel corn crop that is almost unchanged from USDA’s July projection, a larger 4.519-billion-bushel soybean crop, dramatically smaller sorghum production, slightly smaller wheat and cotton crops and a larger rice crop. The more market-sensitive surprise was on the demand side: USDA cut 2026/27 corn ending stocks to 1.653 billion bushels, well below both July and the Reuters trade expectation, while soybean carryout moved the opposite direction to 320 million bushels.

For livestock, the report tightened projected beef and pork production but did not translate that tightening into a more bullish cattle-price outlook. USDA lowered its fed-cattle price forecasts because of weaker-than-expected cattle demand and increased its beef-import projection. Hog prices were raised modestly despite reduced pork exports. Dairy was mixed: 2026 milk production was unchanged, Class III prices were raised, but Class IV and the all-milk price were lowered.

The immediate futures response reflected that nuance. In Barchart’s first delayed post-release snapshot, December corn was around $4.68 3/4, up roughly 1.8%, November soybeans were around $11.76-$11.78, up roughly 0.7%, while wheat remained roughly 3% higher amid both the USDA numbers and escalating Black Sea export disruptions. Rough rice was modestly higher. December cotton was around 85.05 cents, up about 0.8%.

The Biggest Surprise: USDA Found Acres — Lots of Them

The August report answered one of the market’s biggest questions: whether USDA’s incorporation of Farm Service Agency certified acreage, crop-insurance information and satellite data would uncover more planted acreage. It did.

USDA raised 2026 corn planted acreage from 95.3 million acres in June to 96.7 million, while harvested-for-grain acreage rose from 87.4 million to 88.6 million. Soybean planted acreage rose from 85.4 million to 86.8 million, while harvested acreage increased from 84.4 million to 85.8 million.

That means USDA effectively discovered roughly 2.8 million additional planted corn and soybean acres combined versus the June Acreage report. This is important because the Reuters survey had specifically indicated traders did not expect another major acreage surprise. Analysts averaged only 87.359 million harvested corn acres and 84.564 million harvested soybean acres. USDA came in roughly 1.23 million acres above the Reuters expectation for corn and 1.22 million above it for soybeans.

Figure 1. USDA raised combined corn and soybean planted acreage roughly 2.8 million acres above the June Acreage report. Source: USDA NASS, Crop Production, Aug. 12, 2026.

But acreage was only half of the equation. USDA cut its corn yield much more aggressively than expected, and trimmed soybean yield as well. That kept the corn production increase almost completely contained and prevented the added soybean acreage from producing an even larger crop.

USDA Versus Reuters Pre-Report Expectations

Table 1. USDA August estimates versus Reuters pre-report expectations. Sources: USDA, Reuters analyst survey.

Figure 2. Month-to-month revisions to USDA 2026/27 U.S. production and ending stocks, August versus July. Source: USDA, WASDE.

Reuters analysts had expected a 182.4-bushel corn yield, 15.934-billion-bushel crop and only a minimal acreage adjustment. For soybeans, the survey averaged 52.9 bushels and 4.472 billion bushels. Reuters-derived pre-report coverage put new-crop corn carryout at 1.725 billion bushels and soybeans around 306 million. For wheat, analysts surveyed by Reuters were looking for roughly 1.525 billion bushels, including 981 million bushels of winter wheat and about 468 million of other spring wheat.

Corn: More Acres, Lower Yield — but Demand Wins the Report

Corn is arguably the most constructive part of the report. USDA forecast production at 16.013 billion bushels, just 13 million above July despite the 1.2-million-acre increase in harvested acreage. The reason was a sharp yield cut: USDA’s first survey-based estimate came in at 180.7 bushels per acre, down 2.3 bushels from the July trend yield and 5.8 bushels below last year’s record 186.5 bushels. Even so, this would still be the second-largest U.S. corn harvest on record.

The market initially focused on the acreage increase, but the balance sheet is what gives the report its bullish edge. USDA reduced beginning stocks by 75 million bushels, reflecting stronger 2025/26 exports, then raised 2026/27 exports another 75 million bushels to 3.275 billion. Feed use and ethanol use were unchanged. Consequently, ending stocks plunged from 1.790 billion to 1.653 billion bushels, a 137-million-bushel monthly reduction and 72 million below the Reuters expectation.

That lowers the implied stocks-to-use ratio to roughly 10.1%, versus about 11% in July. USDA responded by raising its projected season-average farm price 10 cents to $4.50 per bushel.

USDA did not produce a genuinely small corn crop. Sixteen billion bushels is huge, and harvest-time basis pressure remains likely in high-production regions. But the market’s cushion is materially smaller because demand is absorbing corn rapidly. Strong exports and reduced old-crop carry-in neutralized the extra acreage.

The global side reinforces the U.S. export opportunity. USDA lowered EU corn prospects because of extreme heat and dryness and reduced Ukrainian exports because of logistical disruptions, while raising U.S. exports. Global corn ending stocks slipped 0.6 million metric tons to 274.7 million.

Market implication: bullish relative to expectations. December corn’s post-report rise makes sense even though production exceeded the Reuters average. Traders were effectively paying more attention to the 180.7 yield, 1.653-billion-bushel carryout and stronger export program than to the 79-million-bushel production miss versus the poll.

For producers, however, the report argues for distinguishing futures from basis. Tightening national carryout can support futures while a second largest-ever harvest still overwhelms storage and transportation capacity locally during harvest.

Soybeans: Bigger Acreage Surprise Overwhelms the Yield Cut

Soybeans received almost the mirror image of the corn report. USDA cut yield to 52.7 bushels per acre, slightly under Reuters’ 52.9-bushel expectation and 0.3 bushel below last year’s record. But harvested acreage jumped to 85.781 million acres — more than 1.2 million above the Reuters average and roughly 1.4 million above USDA’s June figure. That pushed production to 4.519 billion bushels, 44 million above July and 47 million above the Reuters consensus.

There is an important crop-quality wrinkle. USDA still expects the national soybean yield to be the second highest on record even though the crop entered August with 63% rated good to excellent, six percentage points below a year earlier. Record state yields are projected in Arkansas, Delaware, Illinois, Indiana, Mississippi, North Carolina and Ohio.

The demand side prevented the larger crop from becoming outright bearish. USDA raised crush by 30 million bushels to a record 2.780 billion, citing strong crush margins and demand for soybean meal and oil. Meal exports rose 700,000 short tons to 22.7 million, and soybean-oil domestic disappearance was raised 355 million pounds. But soybean exports were unchanged at 1.660 billion bushels. Ending stocks increased from 310 million to 320 million bushels, compared with the Reuters average near 306 million.

That is why the initial soybean reaction was positive but noticeably less explosive than corn. The yield was modestly friendly, and the crush story remains excellent, but USDA effectively replaced almost every bushel lost through lower yield with added acreage.

Market implication: neutral to mildly bearish relative to Reuters expectations, but not bearish enough to overwhelm a strong domestic processing story. Soybean rallies will still need either continued export strength, additional yield deterioration during pod fill or further growth in renewable-fuel-driven soybean-oil demand.

Wheat: Tiny U.S. Crop Confirmed, but Global Stocks Complicate the Story

USDA pegged all-wheat production at 1.531 billion bushels, down 5 million from July but about 6 million above the Reuters consensus. Yield was 47.8 bushels per acre, and harvested acreage remained at 32.1 million acres. Ending stocks fell 5 million to 717 million bushels, 22% below last year, while USDA raised the projected farm price 20 cents to $6.20.

Winter wheat production was 990 million bushels, down 29% from 2025 and, if realized, the smallest crop since 1963. The average yield of 47.0 bushels is 7.9 bushels below last year. Durum production fell 6% from July to 66.4 million bushels, while other spring wheat production slipped to 474 million.

Relative to Reuters, however, the report was slightly less bullish than expected: analysts had averaged about 981 million bushels for winter wheat and 468 million for other spring wheat.

The world balance sheet prevents the U.S. shortage from translating automatically into a straight-line bull market. USDA increased global wheat ending stocks to 273.3 million metric tons, although production was cut in the EU, United Kingdom and Brazil. More important for current prices, USDA cut Russian and Ukrainian exports because of logistical disruptions associated with intensifying conflict in the Black Sea and Sea of Azov.

Wheat’s roughly 3% rally around the report therefore should not be credited primarily to WASDE. Prices were already sharply higher before the release as Ukrainian attacks disrupted Russian export infrastructure. The USDA numbers reinforced the lack of U.S. supply cushion, but geopolitical freight and export risk remained the more powerful immediate catalyst.

Market implication: bullish U.S. fundamentals, mixed world fundamentals and exceptionally high geopolitical optionality. The most important wheat number may increasingly be how many Black Sea bushels can physically reach world buyers rather than simply how many bushels USDA says exist.

Sorghum: The Report’s Most Dramatic Supply Cut

Sorghum was the standout supply shock. USDA slashed production from 380 million bushels in July to just 296 million, a reduction of 84 million bushels, or 22%. Yield collapsed from USDA’s July assumption of 69.3 bushels per acre to 55.4 bushels, while harvested acreage slipped to 5.36 million acres. Production is now forecast 32% below last year.

The cut is consistent with crop conditions. Only 36% of sorghum was rated good to excellent on Aug. 2, 30 percentage points below last year, as heat and moisture stress battered the Plains.

USDA had to ration demand aggressively in response. Feed and residual use was reduced from 70 million to 60 million bushels, food/seed/industrial use from 105 million to 80 million and exports from 205 million to 170 million. Even after those cuts, ending stocks fell from 37 million to only 23 million bushels, and the farm-price projection rose 20 cents to $4.30.

Market implication: strongly bullish sorghum basis and relative-value fundamentals, especially in the central and southern Plains. But the balance sheet also says USDA believes high prices or limited availability will ration both domestic and export demand.

For livestock feeders in sorghum regions, this reduces one potential substitute for corn at precisely the point when corn itself is showing a tighter carryout.

Rice: More Acres Turn a Yield Cut into a Larger Crop

Rice delivered one of the more bearish month-to-month supply adjustments.

USDA raised planted acreage 5% from its prior estimate to 2.11 million acres and harvested area to 2.07 million. Yield fell from July’s 7,746-pound projection to 7,644 pounds per acre, but the acreage increase was large enough to lift production from 153.3 million cwt to 158.4 million.

Domestic and residual use was raised 2 million cwt, but exports were unchanged. Ending stocks jumped from 30.9 million cwt to 36.0 million, a 16.5% monthly increase. The season-average farm price remained $14.90 per cwt.

The bearish month-to-month comparison requires context: 36 million cwt of ending stocks would still be 33% below last year. Long-grain production is only 106.7 million cwt versus 153.3 million in 2025/26.

Market implication: bearish versus July, but not a return to burdensome supply. The market has more breathing room than it thought a month ago, not a genuine surplus. Rough-rice futures were modestly higher in the first post-report snapshot, suggesting the added supply was not large enough to overwhelm the broader tight year-over-year balance sheet.

Cotton: Acreage Surges, but Yield Damage More Than Offsets It

Cotton may be the clearest example of why acreage alone does not determine production. USDA raised all-cotton planted area by more than 600,000 acres to 10.47 million and harvested area to 8.19 million acres, more than 8% above July. Yet average yield plunged from 872 pounds to only 798 pounds per harvested acre. Production consequently slipped from 13.70 million bales to 13.61 million despite the acreage increase.

That yield is also 54 pounds below 2025, while only 42% of the crop was rated good to excellent in early August, 13 percentage points below a year ago.

USDA lowered U.S. ending stocks from 4.1 million to 4.0 million bales and raised the projected farm price 2 cents to 75 cents per pound. Globally, the numbers were even more supportive: consumption rose almost 1 million bales to 122.9 million while ending stocks plunged more than 1.5 million bales to 69.7 million.

December cotton traded around 85.05 cents in Barchart’s post-release snapshot, up roughly 0.8%.

Market implication: bullish. USDA essentially said that acreage recovery cannot compensate for widespread yield deterioration, while the global demand side simultaneously tightened.

Cattle and Beef: Less Beef, More Imports — and a Lower Price Forecast

USDA’s cattle assumptions deserve particular attention because WASDE explicitly incorporates the planned Aug. 24 reopening of the Douglas, Ariz., port for Mexican cattle. USDA assumes Douglas reopens but all other Mexican cattle ports remain closed until an official reopening timetable is announced.

Against that policy backdrop, USDA cut 2026 commercial beef production from 25.288 billion pounds in July to 24.967 billion pounds, reflecting slower steer and heifer slaughter and lower cow slaughter. The 2027 projection was also cut.

But USDA simultaneously raised 2026 beef imports from 6.059 billion to 6.132 billion pounds. Exports were essentially unchanged at 2.333 billion pounds, and projected per-capita beef disappearance fell from 59.4 to 58.9 pounds.

Normally, a 321-million-pound cut in beef production would be price supportive. USDA instead reduced its annual 2026 steer-price forecast from $251.10 to $245.35 per cwt, including projected third-quarter prices of $242 and fourth-quarter prices of $245. USDA attributed the cuts to weaker-than-expected demand for fed cattle.

That is a significant message: USDA sees the cattle shortage persisting but believes demand and imports will absorb enough of the tightness to keep cattle prices below its previous forecast.

Live cattle futures were nevertheless higher on the day around the report, with October cattle quoted roughly 0.5% higher in a delayed Barchart snapshot. That divergence suggests the cattle market was not treating the WASDE price revision as decisive, particularly with domestic cattle supplies still historically tight.

For cattle producers, the report is not fundamentally bearish. Beef supply remains constrained. But USDA is warning that a tight herd does not guarantee ever-higher fed-cattle prices if retail demand softens and imported lean beef continues to fill the gap.

Hogs and Pork: Smaller Production, Weaker Exports, Slightly Better Prices

USDA trimmed 2026 pork production from 27.955 billion pounds to 27.876 billion, citing slower slaughter and slightly lighter third-quarter carcass weights. Pork exports were reduced from 7.237 billion to 7.175 billion pounds, while ending stocks increased from 425 million to 445 million.

The annual barrow-and-gilt price forecast nevertheless increased from $64.82 to $65.32 per cwt, reflecting stronger recent prices.

The fundamental message is therefore mixed. Lower production is supportive, but weaker export demand and larger projected stocks absorb part of that tightening. Lean hog contracts were mixed around the session, which is consistent with a report lacking a singular bullish or bearish shock.

Dairy: Class III Improves, but the Producer Milk-Price Outlook Slips

USDA left 2026 milk production unchanged at 236.6 billion pounds and lowered 2027 production by only 100 million pounds to 238.0 billion. Cow inventories were raised for 2026, while output per cow was reduced slightly.

The price changes were more important. USDA raised its 2026 Class III forecast from $16.15 to $16.25 per cwt, reflecting higher cheese and whey prices. But Class IV fell from $18.40 to $18.15, as butter and nonfat dry milk forecasts were lowered. The all-milk price fell 15 cents to $19.85 per cwt.

Trade is also splitting the complex. USDA increased fat-basis exports, largely because of butter, while reducing skim-solids exports because of weaker lactose and nonfat-dry-milk shipments. Imports were raised on both fat and skim-solids bases for 2026.

CME dairy markets were generally firmer during the session — September Class III milk was around $17.31, up about 0.5%, while September cheese was more than 1% higher in delayed quotes — but those moves should not be attributed solely to WASDE.

For dairy producers, the report is mixed to slightly negative on margins. The Class III outlook improved, but the lower all-milk price combined with firmer grain prices after WASDE is not a favorable margin combination.

Figure 3. USDA season-average farm price forecast revisions, August versus July (2026/27 crops; 2026 livestock and dairy). Source: USDA, WASDE.

One Important Methodology Caveat: August Yield Is Not Yet September Yield

The additional USDA graphic supplied with the reports is useful because it emphasizes the agency’s increasingly integrated acreage and yield process. USDA says it combines FSA certified acres, RMA insured acreage, satellite imagery, field observations and producer survey information rather than relying on any single input.

But there is an important distinction for interpreting today’s corn, soybean and cotton numbers. USDA says its July 25-Aug. 5 producer survey involved approximately 14,500 growers, while acreage estimates incorporated administrative data and satellite imagery. However, NASS’s traditional objective-yield field measurements for corn, cotton and soybeans do not begin until September. The August objective-yield work was conducted for winter wheat.

That means the August acreage changes may be relatively well informed by FSA, insurance and remote-sensing data, while today’s corn and soybean yields remain heavily dependent on farmer expectations, statistical relationships, satellite information, weather and crop progress rather than mature physical ear and pod counts.

That distinction makes the September Crop Production report unusually important. USDA itself cautions against treating an August forecast as a final number. Over the past 20 years, the August corn production forecast has had a root-mean-square error of 3.5%; the average absolute change between the August forecast and final corn production estimate has been about 345 million bushels, with individual changes as large as 1.19 billion bushels.

So 16.013 billion bushels is not a verdict. It is the first serious survey-based starting point.

What the Report Means for Markets Going Forward

The August package leaves the crop markets with sharply different stories.

Corn is more bullish than the production headline suggests. USDA found extra acres, but yield deterioration absorbed nearly all of them, while stronger exports cut ending stocks below expectations. A 10% stocks-to-use ratio is not a shortage, but it materially reduces the margin for additional crop losses.

Soybeans have a bigger supply cushion than traders expected. The 52.7-bushel yield is supportive, but USDA found enough acres to push production and ending stocks above Reuters expectations. The saving grace is extraordinary domestic crush demand.

Wheat remains a supply-risk market. U.S. production is historically small, but global stocks are still adequate. Consequently, Black Sea availability and logistics may matter more to prices than incremental U.S. balance-sheet changes.

Sorghum is the tightest surprise. USDA removed more than one-fifth of projected production in a single month and cut ending stocks nearly 38%. The market will have to ration use.

Rice became more comfortable but not loose. Added acres lifted production and carryout significantly versus July, although stocks remain far below last year.

Cotton turned more bullish. More acreage could not overcome a 74-pound yield cut, while global consumption rose and stocks fell sharply.

Cattle remain a supply-tight but demand-sensitive market. Less domestic beef should provide underlying support, but USDA is explicitly counting on more imports and weaker fed-cattle demand. The report argues against assuming low cattle numbers alone guarantee continuously rising prices.

Hogs are mixed. Lower pork production helps, but weaker exports and greater stocks temper the benefit.

Dairy is split. Class III improved, but Class IV and the all-milk price deteriorated, leaving producers with little additional margin protection if feed prices firm.

Upshot: The central takeaway is that USDA’s August reports did not deliver one universal bullish or bearish verdict. Instead, they shifted the source of risk. Before the report, the market’s main concern was whether USDA would discover more acres. It did. Now the question becomes whether the surprisingly low corn yield, badly damaged sorghum crop and declining cotton yield are early signs that late-summer weather has done more damage than acreage revisions can offset. September’s objective field measurements will begin answering that question.

Sources: USDA NASS, Crop Production (Aug. 12, 2026); USDA, World Agricultural Supply and Demand Estimates (WASDE); USDA NASS Agricultural Statistics Board briefing; Reuters pre-report analyst survey; Barchart delayed futures quotes.

AG POLICY & MARKETS DAILY   |   SPECIAL REPORT  |  AUGUST CROP PRODUCTION & WASDE — WEDNESDAY, AUGUST 12, 2026