As the 2025 harvest approaches, U.S. grain markets are under heavy pressure. The latest World Agricultural Supply and Demand Estimates (WASDE) projected record corn yields at 188.8 bushels per acre and total production of 16.7 billion bushels. Soybeans aren't far behind, with USDA forecasting 53.6 bushels per acre and production of 4.3 billion bushels. Together, these numbers paint a bearish picture for prices. But the question lingers: what could turn corn and soybean prices higher?

Analysts point to two main levers: supply shocks and demand strength.

Supply-side uncertainties remain

While USDA's August benchmarks dominate market headlines, historical data show they are far from final. Since 1965, August corn yield estimates averaged less than two-thirds of a bushel per acre off the final number, but deviations have been dramatic in unusual years. In 1983, drought pushed actual yields 18.8 bpa below August's estimate. Conversely, in 1993's flood year, yields undershot by 15.3 bpa. Other swings came from heat stress in 1995, hot nights in 2010, and pandemic disruptions in 2020.

The odds are nearly even: 53.3% of the time August corn yields were too high, and 46.7% too low. For soybeans, the historical split is similarly tight, with outliers tied to drought years like 2012 and 2003, or unexpectedly favorable seasons like 2005.

Weather in 2025 supports strong production

This season's weather has favored crops. July brought above-average rainfall across key Midwest states - nearly 35% above normal - combined with slightly warmer temperatures. USDA models suggest average corn yields of 191 bpa or more could be achieved if conditions hold. For soybeans, August weather is critical. Current data indicate nationwide yields near 53.4 bpa, essentially in line with USDA's outlook.

That leaves little room for weather bulls, who may soon pivot to promoting early freeze risks in a bid to spark price rallies.

Demand must do the heavy lifting

If supply remains robust, any bullish catalyst must come from demand growth. Exports, ethanol output, and livestock feed consumption are the key drivers. While imports typically play a minor role, stocks carried over from prior years account for just 7% of supplies, limiting their market impact.

The real wildcard is global demand. If U.S. exports accelerate, particularly to markets facing their own production shortfalls, or if ethanol plants and livestock feeders step up usage, the grain market's balance sheet could tighten. Without that, the SS Grain Market risks capsizing under the weight of record production.

For now, producers and marketers must navigate a market where supplies look abundant, and demand has yet to prove it can offset the pressure.