Will lower crop yields, Chinese soybean buying, and El Niño create the next big move in grain markets?
Grain markets remained relatively quiet during the week ending August 7, 2026, as traders positioned themselves ahead of the USDA’s August crop report, while weather concerns across the Corn Belt, strong Chinese soybean demand and an emerging El Niño pattern continued to influence the agricultural commodity outlook.
The latest Farms.com Risk Management Ag Commodity Corner+ Podcast, titled “2026 USDA August Crop Report + Wet June East vs Hot/Dry West = Trend Line Yields or Lower?” hosted by Moe Agostino, chief commodity strategist, and Abhinesh Gopal, head of commodity research, examined crop yield expectations, regional weather conditions and factors that could affect grain prices during the remainder of the 2026 growing season.
The average trade expectations ahead of USDA’s August crop report are only for modest adjustments to U.S. crop yields. Trade estimates point to corn yields of approximately 182.4 bushels per acre, compared with 183 bushels in the previous report. Soybean yield expectations are around 52.9 bushels per acre, slightly below the previous estimate of 53 bushels.
However, some private crop estimates indicate greater downside risk to crop yields. Experts cited hot, dry conditions in western Corn Belt states and excessive moisture in parts of the eastern Corn Belt as factors that could push yields below trend.
North Dakota has emerged as a significant concern. The state’s corn crop rated good to excellent fell to 37%, while July precipitation was only about half the normal and temperatures were roughly 4.5 degrees above average. The combination of heat and limited rainfall has raised questions about final yields.
Weather could remain important beyond the U.S. harvest. A potentially strong El Niño pattern is expected to bring wetter conditions during the fall and winter, potentially creating harvest delays and moisture challenges. Farmers may therefore face a narrower harvest window and could benefit from beginning fieldwork as soon as conditions allow.
Soybean demand is another major market factor. China continues to purchase U.S. soybeans, with expectations that it could eventually fulfill a 25-million-metric-ton commitment under the latest US-China trade agreement.
If China reaches that target while domestic biodiesel and crushing demand remain strong, available U.S. soybean supplies could become increasingly tight.
Meanwhile, South American weather presents another potential risk. A “super” El Niño could create planting challenges for South American soybean producers beginning in September.
With crop conditions, global demand and weather uncertainty converging, grain markets could experience increased volatility following the USDA’s August report and as the 2026 harvest progresses.
Watch the 2026 USDA August Crop Report + Wet June East vs Hot/Dry West = Trend Line Yields or Lower? podcast below.
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