The August Crop Check: What We Learned About US Yields, Demand, & the Season Ahead

A recap of our live webinar with Tore Alden (Round Lakes Commodities) and João Pedro Rodrigues Morciani (Helios AI)

Key takeaways:

• USDA cut US corn yield by 3 bushels per acre, while soybean yield held steady.

• Heat during corn silking stressed pollen and grain set, while soybeans benefited from early-season stress followed by moisture.

• Demand stayed strong for both corn and soybeans, limiting downside risk.

• E-15 is gaining support from energy security arguments, not just sustainability ones.

• Brazil and Argentina are taking on a bigger role in global grain and oilseed trade, while Brazil's own biofuel policy keeps more soybean oil at home.

Why Did Corn Get Cut While Soybeans Held Steady?

The conversation opened with the most immediate question on everyone's mind: where does the US crop actually stand? The latest estimate cut corn yield by 3 bushels per acre, while soybean yield held.

That split makes sense once you look at when the weather stress hit. Corn faced heat during silking, and that timing creates real problems for pollen attachment and grain set on the ear. Soybeans, by contrast, often respond better when the season opens with some stress and then gains moisture during pod fill, since that pattern pushes the plant to focus energy on filling pods rather than building excess canopy.

Soil moisture backed this up. Departure-from-normal maps showed a green belt across the heart of the Corn Belt, pointing to decent soil moisture across much of the region, a setup that favors soybeans in particular since they avoid the same overnight-heat pollination damage corn faces.

The bigger point from the session: weather still matters, but stronger genetics and better traits keep changing how crops respond to it. That doesn't mean weather risk disappears. Fertilizer costs, planting timing, and heat during key growth stages still shape the yield outcome.

Why Isn't Demand Letting Corn Fall Further?

Corn doesn't trade on supply alone, and that was a central theme of the discussion. Demand keeps grinding higher, which makes the market harder to push sharply lower.

Feed demand stays solid because cattle prices remain high. Ethanol demand also stays steady, and higher gasoline prices increase ethanol's value: with gas around $4, ethanol looks a lot more attractive than it does when gas sits near $2.

That demand structure limits downside risk. Even if weather improves and yields move higher, strong demand still makes a deep selloff harder to build. A move back toward $3 corn looks difficult as long as feed demand and ethanol demand stay firm.

One more shift worth watching: the US still acts as the residual exporter for corn, but South America is taking a larger share of future export growth, with Brazil in particular gaining importance as an export player.

Is E-15 an Energy Security Story Now, Not Just a Sustainability One?

The push for E-15 is gaining support from an argument that wasn't as prominent a few years ago: energy security. The renewable fuel standard already frames part of the debate around resilience and strength against external shocks, not only around sustainability.

Higher oil prices add another layer. When crude moves above $100 per barrel, biofuels gain a stronger argument in global energy planning, and even after oil eases back, the energy security case remains.

E-15 also connects to octane needs in the US. As the old octane booster leaves the market, ethanol steps in to fill that role, which keeps ethanol demand tied to economics rather than only to mandate volumes.

There are tradeoffs. E-15 carries lower vapor pressure and lower gas mileage, so it doesn't fit every policy goal cleanly. Still, the energy security argument stays strong, especially while oil markets remain volatile.

Did a Quiet Policy Shift Just Tighten the Soybean Oil Market?

Soybeans move from weather into policy just as quickly as corn moves into demand, and this was one of the more technical parts of the conversation.

The shift from the old blender tax credit to the new 45Z credit changed the biomass-based diesel market. Under 45Z, credit value depends on the carbon intensity of the feedstock, a change that initially hurt soybean oil relative to lower-carbon feedstocks like tallow, poultry fat, and other waste products.

Then the withdrawal of the indirect land use change (ILUC) charge changed the picture again, making soybean oil more competitive under 45Z and giving it a larger role in biomass-based diesel demand.

That policy shift matters because low-carbon-intensity feedstocks remain limited. Waste products don't expand as quickly as crop-based feedstocks, which creates a supply constraint and makes the market more exposed to trade flows. The result: soybean oil demand from biofuels is jumping, and the second half of the year looks tighter than the first.

A few numbers from the session stood out:

• The industry needs strong operating rates to meet the mandate.

• Average capacity utilization runs near 66%.

• June data suggests the industry needs to run at full capacity over the back half of the year to meet requirements.

• The D4 and advanced mandate together add more feedstock demand on top of the biomass-based diesel mandate.

That combination keeps soybean oil balance sheets tight even when supply looks large on paper.

Is the Real Risk This Season Sitting Outside the US?

Attention shifted next to South America, where the risk profile looks very different. Fertilizer prices jumped sharply around the war-driven shock, with urea moving from about $400 per ton pre-war to nearly $700 per ton in April before easing back. US farmers locked in costs earlier, but South American farmers carried more of the margin pressure, and that pressure now combines with a developing El Niño.

Brazil. Brazil likely adds only a marginal increase in acreage this season rather than another large expansion, since many farmers already invested in new areas during earlier margin booms. Argentina stays roughly steady.

The bigger concern sits in Brazil's second corn crop, the safrinha. That crop carries the most El Niño risk because delayed soybean planting pushes the entire calendar back. In central-west Brazil, rainfall behaves like a light switch: when it stops, it stops, which makes the second corn crop especially sensitive to planting delays and late-season finish risk. Mato Grosso and the broader central-west region matter most here, since they hold a large share of production, and climate stress signals already point to higher dry-stress risk in the planting window, a risk El Niño raises further.

The timing question is simple: can farmers plant soybeans on schedule next month, or will they wait longer? The longer the delay, the bigger the concern for the second corn crop.

Argentina. El Niño and La Niña don't hit crops in a simple one-to-one way; context matters, especially soil moisture heading into the season. La Niña brings dryness to southern South America and hits Argentina hard, and a multi-year La Niña creates far more damage than a single-year event. Argentina's 2023 crop, for example, dropped to 25 million tons, roughly a 50% cut, after an extended dry spell. That same context-dependency applies to El Niño: the market can talk about a strong event, but the actual crop impact depends on moisture, timing, and persistence.

Is Brazil's Biofuel Policy Reshaping Global Soybean Oil Trade?

One of the more overlooked threads from the session: Brazil's own biofuel policy is changing the global soybean oil story. The country's new fuel policy framework pushes biodiesel mandates higher and adds future support for renewable diesel and sustainable aviation fuel. Brazil is already moving from B12 to B14 blending, with a path toward B20 by 2030.

That shift is cutting soybean oil exports sharply. Brazilian soybean oil exports fell about 40% in a year and now sit below 2 million tons annually, as the country moves toward a more closed domestic market. If the policy path continues, Brazil could even become a soybean oil importer, though not at a large scale. More significantly, Brazil is effectively removing itself from the global soybean oil export pool.

That leaves Argentina and the US to fill more of the gap, but both countries also face stronger domestic pull from biofuels and other uses. The global trade picture keeps shifting toward tighter export availability.

What Should You Watch Before Harvest?

The session closed on what to watch next, and it came down to three themes:

1. US corn and soybeans face uneven weather effects. The same season can help one crop and hurt the other, depending on when the stress hits.

2. Demand stays strong enough to limit downside in grains and oilseeds. Supply isn't the whole story this year.

3. South America, especially Brazil, carries the larger weather and policy risk. Between El Niño exposure in the safrinha corn crop and a biofuel policy reshaping soybean oil trade, the bigger swing factors sit south of the equator.

The near-term trading question centers on weather forecasts. As long as the Corn Belt keeps decent moisture and avoids a hot, dry turn, buyers can afford to wait. If the forecast flips hotter and drier, expect buyers to get more active, fast.