The December WASDE is not historically a big market mover as USDA does not adjust domestic production, just demand. However, the agency did provide more than a lump of coal for the corn market in the report.
USDA Cuts Corn Ending Stocks
The agency made an aggressive cut to U.S. corn ending stocks for 2025-26 by 125 million bu. to 2.029 billion bu. The cut came as a result of the agency raising corn exports by 125 million bu. to a record 3.2 billion bu.
Jim McCormick with AgMarket.Net says that was not a major surprise considering the strong pace of corn export sales, plus export shipments to date are up nearly 69% over last year. “So they raised the exports, 125 million, and it makes sense that they did it. Exports have been running red hot here for the last couple months. So the government reflected that in the balance sheet and they took that carryout now down to just a shade over 2 billion bu.” he says. Still, McCormick says carryout is 500 million bushels above last year which is a headwind for the market.
USDA Cuts Global Corn Carryout Well Below Last Year
USDA lowered global corn carryout by 2.2 million metric tons to 279.2 million, well under last year which was also constructive according to McCormick. “The world carryout numbers are dropping. We are now roughly at 10-year lows on raw stocks. We’re at 10-year lows on stocks to use. Now, these numbers will be comfortable, if we have no production problems in South America.” However, he states that if there is a production hiccup or China buys due to the quality issues they are seeing with their corn crop that could spark a rally.
USDA did leave South American corn production unchanged with Brazil at 131 MMT and Argentina at 53 MMT.
U.S. Wheat Ending Stocks Unchanged, Global Carryout Hiked
The one caveat is global wheat supplies are capping corn prices according to McCormick and it was reflected in the balance sheets as USDA raised carryout 3.4 million tons to nearly 275 MMT. That is also around 15 MMT higher than a year ago.
McCormick says that is because USDA raised production for a handful of major wheat producing countries. Canada’s crop was pegged at a record 40 MMT, up 3 MMT, Argentina’s production was also a record 24 MMT, up 2 MMT and the EU was 1.7 MMT higher.
He says, “They raised the Canadian crop, they raised the Australia crop, and they raised the Argentina crop, and on the Argentina crop, it’s a big crop, but it’s also got quality issues, which some of that wheat’s going to compete with the corn on the international feed market. So right now, the market is going to struggle in the wheat near term.”
USDA left U.S. ending stocks unchanged at 901 million bu.
U.S. Soybean Balance Sheet Unchanged, Global Revisions Minor
On soybeans, USDA raised world ending stocks only .4 MMT to 122.4 MMT and left South America production unchanged with Brazil at 175 MMT and Argentina at 48.5 MMT.
USDA also kicked the can down the road leaving U.S. ending stocks at 290 million bu. “You could argue it’s a little bit of the gift because I think with China, even buying 12 million metric tons, I think with the lost sales we’re getting from the other countries, I think it’s going to be hard to keep this carry out under 300 million when it’s all said and done,” he explains.
The biggest changes on supply and demand will come with the final report in January.
