The May World Agricultural Supply and Demand Estimates (WASDE) was largely bullish for corn and soybeans, but bearish for wheat. At least on the surface, USDA’s estimates for both old and new crop corn and soybean ending stocks were below average trade guesses.
However, there is some skepticism about the report, as the agency noted it would only consider the trade policies in effect at the time of publication.
Solid Soybean Demand
USDA cut old crop soybean ending stocks 25 million bu. to reach 350 million, and in its first official 2025-26 estimate, put new crop carryover at 295 million bu. — 55 million below last year.
Jim McCormick, AgMarket.Net, says it was a reflection of solid demand.
“We’ve seen very good exports down the line here the last couple of months, and USDA took that into account. Now, they did say they were going to take the current trade policy as it is into effect. Did they take the deal with the Chinese over the weekend? I’m not certain. But the net effect is this carryout is less than what the trade was thinking for both the old crop and the new crop.”
McCormick is referring to the news that the U.S. and China both eased tariffs for 90 days: China dropped levies to 10%, and the U.S. slashed them to 30% on imports.
While that may not be reflected in the estimates, McCormick doesn’t think a trade deal is factored into the report either.
“With the fact that they’ve actually got the exports lower for new crop for this upcoming year, it tells me they — at this point — do not believe we’re going to get a second Phase One deal where China is going to commit to buy a lot of grain,” he explains.
Bullish in Corn
USDA also provided bullish numbers for the corn market:
- Old crop ending stocks were lowered 50 million bu. to 1.42 billion.
- For new crop, carryout was 385 million bu. above last year — but that was 220 million bu. lower than the trade guess.
McCormick says increased demand offset a record corn crop projection of 15.8 billion bu. with 4.7 million more acres than a year ago.
“The fear was, if you get a carryout over 2 billion for new crop, would it drag this market down without a weather problem? Now, you’re down to 1.8. So, you’ve solved some of that problem,” he says.
McCormick thinks this leaves less room for error during the growing season. But are USDA’s trend line yields of 181 bu. on corn and 52.5 on soybeans even achievable?
“I think the beans may be a little bit better because your acres are down a little bit,” he says.
However, he is more skeptical about corn yields.
“We’ve yet to hit trend in recent history. And if you look at these corn acres they came out with in the survey in March, we’re probably getting a little bit more of the ground that traditionally isn’t the best ground in the United States,” McCormick says.
Bearish in Wheat
USDA’s initial winter wheat crop estimate was up 33 million bu. from last year at 1.38 billion bu., with yield up 2 bu. at 51.6 bu.
USDA also raised ending stocks to 923 million for the 2025-26 season, which is 80 million above last year and above expectations.
“The crop’s getting bigger. The best hope we can get for wheat is if the market gets to a low enough price where we stimulate some demand,” McCormick states.
However, wheat is already at contract lows for hard red winter and soft red winter wheat and may already be low enough he adds.
