Acreage Data Answers One Question, but More Remain
The June 30 Acreage and Quarterly Grain Stocks reports gave agricultural markets a lot to digest heading into July, with crop prices responding to new acreage data and updated supply expectations. The short version? Acreage was largely neutral, grain stocks were ample but not quite as bearish as many expected and the market’s biggest questions still lie ahead.
Neutral acreage, abundant production potential
Unlike June, when markets were still waiting for acreage data, July begins with markets digesting the first major look at what producers actually planted, which shapes borrower revenue potential. In the Acreage report, corn planted area came in at 95.3 million acres, down 3% from 2025 and essentially unchanged from the March Prospective Plantings estimate. Soybean planted area moved up to 85.4 million acres, up 5% from 2025 and slightly higher than the March estimate. All wheat acres were down 6%. Given all the uncertainty surrounding input costs and planting decisions this spring, the Acreage report was relatively neutral.
However, the national story did not play out evenly across the country. Individual states varied up and down on acres based on weather and economic conditions. It is a good reminder that stable national acreage doesn't mean every state followed the same path, or that every borrower faces the same outlook.
The Quarterly Grain Stocks report was also important. Corn stocks were 14% higher than a year ago, while soybean stocks were up 5%, and wheat stocks were up 8%. On the surface, that is a lot of supply. However, corn stocks came in below what many in the market expected, suggesting stronger use, or disappearance, than feared. In other words, the report still showed large supplies, but not worse-than-expected supplies. Sometimes, that is enough to help markets find a little support.
The July World Agricultural Supply and Demand Estimates, or WASDE, provided the next key piece of information. Because the July WASDE comes shortly after the June 30 reports, it often confirms crop data more than it surprises. That certainly was the case for this July’s report, which largely confirmed the corn and soybean news of the week prior.
For corn, the July WASDE showed slightly smaller supplies, greater exports, and reduced—but still very large—ending stocks. The 2026-27 season-average farm price was unchanged at $4.40 per bushel. For soybeans, the July WASDE showed increased production from the Acreage report’s higher planted area and slightly higher exports. Season-average soybean prices were also unchanged, remaining at $11.40 for the 2026-27 crop year. Immediate reactions in the futures markets were generally positive, with both crops seeing upward trends.
For lenders, the key question is whether any price support is enough to improve projected cash flow, especially for borrowers facing elevated input and interest costs.
The livestock lowdown
For dairy, hogs, beef, and poultry, the July WASDE was mixed.
Milk production forecasts were raised for both 2026 and 2027, with higher cow inventories offsetting a slight reduction in 2026 output per cow. Despite demand support, price forecasts were lowered as stronger milk supply growth pressured milk price expectations. The 2026 Class III price forecast was lowered to $16.15 per hundredweight (cwt), Class IV was lowered to $18.40 per cwt, and the all-milk price forecast was lowered to $20.00 per cwt.
The July WASDE projected lower pork production on lower pig crop and reduced slaughter. Hog prices are lowered for the remainder of 2026 on recent price weakness for hogs and pork but are unchanged for 2027. On an annual basis, the July 2026 WASDE lowered 2026 hog prices to just under $65 per cwt.
Slower expected steer and heifer slaughter and reduced dressed weights resulted in USDA dropping forecast beef production in the July WASDE. The 2026 annual slaughter steer price forecast was raised just slightly to $251 per cwt. New World screwworm remains a topic to watch in southern plains states.
Lastly, USDA projected higher broiler production for both 2026 and 2027, reflecting recent hatchery and placement data. Broiler prices were lowered for both years to reflect recent market weakness and continued production growth.
What lenders should watch next
From here, the market conversation shifts from acres to yield, weather and demand. Markets are also finding some price support from excessive rain and severe weather in some parts of the Corn Belt. July and August weather will be critical in determining whether strong early-season crop conditions translate into strong yields.
Demand is the other big “what happens next” question. Export sales, especially to China, remain closely watched for row crops like soybeans. Domestic demand, including feed, ethanol and soybean crush, will also matter as markets evaluate whether low prices are enough to encourage stronger use.
On the cost side, borrower repayment capacity remains under pressure. Energy markets have eased significantly from their spring highs, but uncertainty around the U.S.-Iran agreement to reopen the Strait of Hormuz has renewed concerns about energy and fertilizer price pressure. Escalation between Russia and Ukraine is also fueling the potential for energy market volatility. Higher fuel, fertilizer and interest costs can increase operating credit needs and reduce repayment flexibility, even when commodity prices find short-term support.
For livestock and dairy borrowers, the credit story varies by sector: cattle prices remain supported by tight supplies but borrowers face weather and disease concerns, while lower milk, hog and broiler price forecasts could pressure cash flow despite production gains.
Policy uncertainty and the macroeconomic picture
Policy uncertainty is also part of the summer outlook. For lenders, these unresolved policy items matter because they can affect borrower cash flow, repayment capacity, operating credit needs and risk management decisions.
Farm bill discussions have advanced in the Senate, but limited legislative days for Congress make the timeline for passing a bill very tight. For trade policy, the United States-Mexico-Canada Agreement moved into annual review after the United States declined to renew it for a new 16-year term. The agreement remains in force, but the annual review process adds another layer of risk. Additional ad hoc farm assistance remains under discussion. Year-round E15 is also back in the conversation as part of broader supplemental discussions. As always, a lot can happen before any of these issues reach the finish line.
Macroeconomic news continues to point toward a higher-for-longer interest rate environment. May Personal Consumption Expenditures (PCE) inflation, the Federal Reserve’s preferred inflation measure, rose 4.1% from a year earlier. Core PCE, which excludes food and energy costs, remained elevated at 3.4%. First-quarter GDP was revised up to 2.1%, but the improvement was partly tied to lower imports rather than broad consumer strength.
In June, the labor market showed payrolls increasing by just 57,000 jobs and nonfarm unemployment little changed at 4.2%. Against that backdrop, the June Federal Open Market Committee meeting ended with no change to the federal funds target range of 3.50% to 3.75%, reinforcing that rate relief is likely delayed until inflation shows more meaningful progress.
The June 30 reports answered the acreage question, but they did not settle the outlook for borrower cash flow and repayment capacity. From here, weather, demand, input costs, interest rates and policy developments will determine whether neutral acreage data turns into stronger repayment capacity or continued financial pressure. In livestock and dairy, sector-specific supply and demand trends will remain important to monitoring borrower cash flow, working capital and risk exposure.
The information provided is accurate to the best of the author’s knowledge at time of publishing. It is presented “as is” with no guarantee of completeness, accuracy or timeliness, and without warranty. The information is educational in nature and not investment, legal, accounting, tax or other advice of any kind.