The long-awaited supply and demand reports from USDA are now out, but they did little to spur the grain market in a positive direction at the end of last week. The biggest shocks came from USDA cutting corn yield less than a bushel and lowering soybean exports by 50 million bushels, while still acknowledging the China purchase commitments.
While the corn crop shrank since September, the U.S. is still looking at record production and yield at 186 bu. per acre.
USDA cut corn yields 3 bu. in Iowa and 6 bu. in Minnesota, but it raised yields in Illinois by 2 bu. and South Dakota by 6 bu. The national yield was lowered by only 0.7 bu., a shock to market analysts based on disease and production issues.
“There’s some awfully good corn out there this year,” says Matt Bennett, AgMarket.Net. “Corn that performed better than what you would expect for the kind of weather we had, but there was also some train wrecks and a lot of growers who indicated to us their crop was good, it just wasn’t quite as good as a year ago, so we were shocked to see a 186 yield.”
The corn yield cut lowered production by 62 million bushels.
A 207-million-bushel increase in carry-in increased 2025-26 carryout, by 44 million, to just under 2.2 billion bushels. USDA offset part of the supply increase by raising corn exports by 100 million bushels based on current sales to a record 3.1 billion bushels.
“You could make the case that number could have looked a lot worse from a carryout standpoint today if they were going to keep that corn yield as strong as what they did,” Bennett says. “Bottom line is these exports are impressive to say the least.”
However, the carryout is still bearish for corn prices.
“You’d stand to reason we should move lower with 2 .1 billion bushels,” he adds.
USDA lowered soybean yields a half bushel to 53 bu. per acre, matching trade expectations, and that lowered production by 48 million bushels, so not a surprise to Bennett.
“Some of these early-planted beans were phenomenal, quite frankly,” Bennett says. “You get out into late-planted beans, it’s a little different story. There were a lot of extremely dry beans. I’ve got to think this moisture content being so low in the eastern Corn Belt, similar to what we saw in the western Corn Belt a year ago, probably factored in to dial that yield back just a little bit.”
The disappointment for the soybean bulls came with USDA lowering exports by 50 million bushels despite acknowledging the soybean sales commitments from China in the recent trade framework.
“I think they’re concerned about Chinese business showing up,” Bennett says. “Other than China, we’re going to have a hard time competing. As of right now, we’re certainly a little more expensive on the world market than what Brazil origin beans are.”
The compiled backlog of daily export sales, which showed just 12.2 million of soybeans sold to China and 22.6 million to unknown, also fell short of expectations.
“As far as these daily announcements go, that was a big disappointment, seeing that China really hadn’t done much of anything,” Bennett says.
For wheat, the report was bearish as U.S. carryout was raised 58 million bushels and global stocks surged 7.4 mmt higher.
