U.S. corn futures plunged to a fresh three-month low on Tuesday. The market extended losses from the previous day. This decline followed a surprising report from the U.S. Department of Agriculture.
USDA Delivers Shock to Corn Market
The USDA released its latest outlook on Monday. It increased the estimate for the 2025 U.S. corn harvest. This new projection set a record high. Analysts had expected a downward revision. The agency also reported the largest ever quarterly stocks of corn in the United States.
These numbers caught traders off guard. The bigger than expected supply outlook pressured prices immediately. Corn futures continued to slide through Tuesday's session.
Soybeans Follow Corn Lower
Soybean futures also dropped significantly. They touched a two-and-a-half month low. The USDA trimmed its forecast for U.S. soybean exports. At the same time, it raised the harvest estimate for Brazil.
Brazil is a major rival supplier in the global soybean market. Its record-large harvest is likely to reduce demand for American soybeans in coming months. This double whammy of weaker exports and stronger competition hurt prices.
Market Reaction and Analyst Views
Losses on Tuesday were somewhat limited by bargain buying. Technical support levels also helped slow the decline. Traders began shifting their focus to weather conditions in Brazil.
Brazilian farmers will soon plant their large second corn crop. Weather patterns there could influence future supply.
Ted Seifried, chief strategist at Zaner Group, shared his perspective. "For corn, this was a rip-the-Band-Aid-off event," he said. "These are probably the worst numbers we're going to see. If anything, there is some risk on South American weather."
He expressed a different view for soybeans. "But for soybeans, I don't feel like it's the same sort of mentality," Seifried noted.
China Purchase Uncertainty
Another factor clouding the soybean outlook involves China. Recent weeks saw a surge in U.S. soybean purchases by Chinese buyers. However, it remains unclear if this buying spree will continue.
China has been working toward a 12-million-metric-ton buying target. Once that goal is achieved, demand may soften. This uncertainty adds to the bearish sentiment for soybeans.
Closing Prices and Market Levels
At the Chicago Board of Trade, specific contracts showed these losses:
- March corn was down 1 cent at $4.20-1/2 per bushel. It earlier touched its lowest point since October 16.
- March soybeans fell 10-1/2 cents to $10.38-1/2 per bushel. This marked the lowest level since October 23.
- March wheat edged down 3/4 cent to $5.10-1/2 per bushel.
The trading session reflected broad weakness in grain futures. Corn led the decline on the shock USDA supply data. Soybeans followed suit due to export and competitive pressures.
