China's soy moves and U.S. corn yields: August 3, 2025

2025-08-03 23:16:29

China’s U.S. soybean snub becoming unprecedented

As of July 24, U.S. exporters had sold just over 3 million metric tons of soybeans for export in 2025/26, which begins September 1. That volume is a 20-year low for the date and is down 12% from last year.

New-crop sales are struggling because China has yet to buy a single cargo, and this is China’s latest start in the U.S. bean market since 2005. However, in 2005, the first Chinese purchase came during the week ended August 11.

If China sits out beyond that timeframe this year, it will be the latest they have waited to start buying since at least 1999, the extent of USDA’s online database. This would thrust the U.S.-China soybean trade flow into uncharted waters.

High-level U.S. and Chinese officials met in Stockholm last week to discuss trade, and U.S. Secretary Scott Bessent said late last week that the “makings of a deal” were there and he was optimistic about the path forward.

But Brazil still has a hefty amount of soybeans to export. Current shipping lineups show forward volumes similar to two years ago, when Brazil’s August-December bean shipments hit a massive new record.

For interest, China imported 28.3 million metric tons of soybeans in 2005/06 compared with an estimated 106.5 million in 2024/25. Both Brazil and the United States exported roughly 25 million tons of beans each to all destinations in 2005/06, and at that time, Brazil was already closing in on the United States’ title of largest supplier to China.

 

U.S. corn conditions point to 184 – 188 bpa yield

If you were ever to make U.S. corn yield assumptions using crop conditions, late July is the time to do it. Generally, this is not advised because the U.S. Department of Agriculture does not explicitly use crop conditions in yield forecasts and in some years, the ratings simply don’t seem to jibe with yield outcomes.

As of July 27, 2025 (week 30), USDA had rated the U.S. corn crop as 73% good-to-excellent, the week’s highest since 2016. This includes top grower Iowa at 87% good-to-excellent, the state’s best rating for any week since 1994.

Yes, all the makings of a monster U.S. corn yield are there, and the market is clearly preparing for it. But what might crop conditions by themselves imply for yield potential?

I calculated my own trendline yield for the past 40 years since USDA’s methodology has shifted over the years. This brings me to a trend yield of between 180 and 181.5 bushels per acre for 2025. Keep in mind that USDA’s 2025 trend yield is 181.

A simple linear regression of weekly corn conditions against final yield deviations produces the best results in weeks 29 and 30, with an R-square of near 0.70. This means that 70% of the yield variation can be explained by those weeks’ conditions.

This year’s conditions suggest final 2025 yield between 2.1% and 2.6% above my personal trend, resulting in a range of 184.1 to 186.1 bpa.

By comparison, if I use USDA’s trend yield history, recent weekly corn conditions imply yield between 187.5 and 188 bpa, though this model has a weaker R-square than mine, suggesting less certainty.

Obviously, model reliability could be enhanced if including other factors like July or August weather, so the above exercise should be interpreted with caution.

 

Three-peat record U.S. corn yield?

Sticking with the theme of crop conditions, recall that U.S. corn yield notched consecutive records in 2023 and 2024 of 177.3 and 179.3 bpa, respectively. Almost everyone agrees at this point that 2025 will set a new benchmark. But how do the latest conditions compare with the same weeks in 2023 and 2024?

Nationally, week 30 conditions were 5 percentage points lower than a year ago. When comparing week 30 state-level conditions with the last two years, Indiana and Ohio emerge as potential exposures given current ratings below both 2023 and 2024. To their north, Michigan is currently unimpressive at 49% good-to-excellent. But Michigan’s 49%? Impressively, the ONLY state on this list with late July ratings below 61%, and that is the 2025 crop’s secret weapon: consistency. Plus, the near-term weather forecast is largely yield-supportive.

The 18-point gap between 2025 and 2023 is glaring. How did 55% good-to-excellent in late July 2023 turn into a record yield? Well, that record 2023 yield was actually 2.3% below USDA’s trend, so technically this is not an outlier. Still, final 2023 yield caught the trade way off guard, coming in much higher than expected. This demonstrates the inherent problem with linking crop conditions and yield, as certain interpretations of the data can lead the user astray. Ratings are simply one of the many indicators of yield potential, and they can never tell you the whole story.

 

China’s ‘meal deal’ switching up global trade

Soybean processing capacity is on the rise, as are soybean meal stockpiles, and this global meal glut is glaring on the board. Front-month CBOT soybean meal futures last Wednesday hit their lowest levels since March 2, 2016, and Wednesday’s settle of $260.70 per short ton was 26% lower than on the same date last year.

Meal futures bounced late last week, but they are still at the lowest levels for early August since 2007. Meal’s super cheap rates have spurred the unthinkable – China importing the high-protein feed ingredient.

China traditionally buys North and South American soybeans and crushes them at the ports when the cargoes arrive, and this system never really allowed meal imports to be economical.

But last week, Chinese buyers signed their third deal since June to import soymeal from Argentina, the world’s largest exporter. Not only is Argentine meal cheap, but Buenos Aires’ recent move to permanently reduce export taxes on grains and oilseeds makes Argentina’s offerings even more competitive.

To be sure, these three cargoes, the first booked since China approved Argentine meal imports in 2019, are a relative drop in the bucket for both parties. But it demonstrates how recent developments in the oilseed market could actually shift the status quo.

In fact, excessive soymeal and soyoil supplies in China prompted a rare 150,000-ton Chinese soybean oil sale to India last week at a discount to offerings from South America, India’s normal supplier.

 

Funds stick by bearish CBOT corn bets

Large money managers in the week ended July 29 made very little changes to their net short position in CBOT corn futures and options. At 181,185 contracts, their corn net long compares with 295,096 a year earlier. This demonstrates that funds have some room to keep selling if they so wish, but they have made very minimal moves in the latest two weeks. Total open interest in corn futures and options is 1% lower than a year ago.

As of July 29, money managers established their most bearish view in CBOT soybean futures and options since early April. Their latest net short of 36,311 contracts, up about 25,000 on the week, compares with 178,591 a year earlier. That year-ago stance was just a few contracts away from their record net short, also set in mid-2024.

Money managers forged a record net short in CBOT soybean meal futures and options in the week ended July 29. That position, some 133,358 contracts, is little changed from the previous four weeks. On the other hand, funds’ net long in CBOT soybean oil futures and options reached an 11-week high in the week ended July 29 at 66,600 contracts. While that is far from an all-time high, that is just about their most bullish soyoil stance on record for the end of July.