The U.S. corn market faced heavy selling pressure Tuesday after the USDA sharply increased its 2025 yield and production forecasts, signaling an abundant supply outlook that could weigh on prices well into next year.

In its August report, USDA pegged average corn yields at 188.8 bushels per acre, well above the 184.4 bpa expected by analysts and topping the trade's highest estimate of 188.1 bpa. Production is forecast at 16.742 billion bushels, up nearly 13% from last year and well above the 15.99 billion bushels the market anticipated. This surge is expected to push 2025-26 ending stocks to 2.117 billion bushels, a seven-year high and a 62% jump from the prior season.

"The big story on the world stage is the absolutely massive U.S. corn harvest estimate," noted Karen Braun, Chief Market Analyst at Zaner Ag Hedge.

While corn took the headlines, the soybean market moved in the opposite direction. USDA forecast production at 4.292 billion bushels, 1.7% below 2024 output and short of trade expectations of 4.368 billion bushels. Average yields were raised to a record 53.6 bpa, but harvested acreage was reduced by 3% to 80.1 million acres. The tighter-than-expected supply outlook lifted November soybean futures near three-week highs.

Wheat saw a smaller adjustment, with winter wheat production lowered by 26 million bushels to 1.355 billion, still slightly above expectations.

Market reaction was swift. By mid-morning, December corn futures fell 9.75 cents to $3.98 after touching a contract low of $3.9475. November soybeans rose 20 cents to $10.3125, their highest intraday level since late July. September SRW wheat slipped 8 cents to $5.07, hitting a fresh contract low earlier in the session.

USDA Corn & Soybean August Estimates

Note: Yield measured in bushels per acre; production in billions of bushels.