At 11 a.m. CST on Monday, Jan. 12, USDA will set the stage for 2026. First by looking back to late 2025 and providing stocks estimates as of Dec. 1, as well as an estimate of winter wheat acres planted last fall. At the same time, the Crop Production and World Agricultural Supply and Demand Estimate (WASDE) reports will give supply and demand forecasts for the year ahead.

CORN

Most-active corn futures have trended steadily higher through the final four months of 2025. But the March board has recently lost some steam when attempting to extend the rally beyond $4.50, with bullish arguments of record-strong demand offset by bearish concerns of a daunting record amount of supply. Monday's January USDA reports will shed some more light on the underlying fundamentals driving the corn market.

Among the reports USDA will release on Monday is its quarterly Grain Stocks report with on-farm and off-farm inventories as of Dec. 1, 2025. This report will, of course, be given context by the beginning corn supply published in the Crop Production and WASDE reports, released at the same time Monday.

Analysts are expecting, on average, roughly 200 million bushels (mb) less corn production than was estimated in the November reports, driven by expectations for a lower national average yield estimate of 183.9 bushels per acre (bpa), down from 186 bpa in November. This would, of course, still be both a record yield as well as record production for the United States. As for Dec. 1 corn stocks, the average guess for Monday, according to the Dow Jones pre-report survey, is for 13.040 billion bushels (bb) of corn on hand after the first quarter of the 2025-26 marketing year -- the largest on record.

Assuming the estimate for the beginning corn supply is correct at 18.076 bb (not accounting for imports), the above Dec. 1 stocks total would imply first-quarter corn demand as roughly 5.036 bb, also a record if true. My personal estimate is for 13.09 bb of stocks as of Dec. 1, on slightly lower production and disappearance as compared to Dow Jones.

Looking deeper into corn demand, exports remain the prime candidate for added bushels, with commitments as of the most recent USDA update up 30% to end 2025, and shipments through the first quarter of 2025-26 a record by a wide margin. Corn usage for ethanol has also garnered some recent concern for an area that may be reduced. While I could see the eventual need for a cut to the 5.6 bb forecast, given corn grind through the first quarter ran almost exactly even with 2024, I wouldn't be surprised if USDA waited to see how summer driving demand and subsequent blending plays out.

On the bottom line, despite a record-large Dec. 1 inventory, I still expect to see USDA's estimate for 2025-26 ending corn stocks reduced. The analysts surveyed by Dow Jones would concur with a prediction of 1.982 bb, down from 2.029 in December.

For the world corn market, most market attention will go to South America, where analysts expect to see recent crop-friendly weather reflected in higher production forecasts. Currently, Argentina would be the most likely to receive an upward adjustment, given that the vast majority of Brazil's corn production comes via the safrinha crop, which won't be planted until February and March. That being said, analysts are expecting, on average, 280 million metric tons (mmt) of world corn ending stocks, up 800,000 mt from December if true and offsetting the reduction in U.S. stocks outlined above. An increase of 2 mmt or so to Argentina's 2026 crop forecast (53 mmt in December) seems like a realistic way in which higher world stocks could still be the case, given that the most recent Buenos Aires Grain Exchange crop report pegged conditions at a staggering 82% good to excellent.

SOYBEANS

Soybean futures have been on a roller-coaster ride to close out 2025 and begin 2026, with March futures trading last Friday (Jan. 2) to a complete retracement from mid-November highs back to mid-October lows, a $1.22 1/4 price swing in a month and a half. Traders will eagerly look to see what adjustments USDA will make after two months of wild speculation regarding what the true demand is for U.S. soybeans.

First, however, USDA will revisit 2025 U.S. soybean production, which is expected to decline again next Monday after a 48-mb cut in November. Analysts surveyed by Dow Jones expect, on average, to see a national soybean yield of 52.7 bpa, down from 53 bpa in November, which would result in 4.232 bb of production, down 21 mb from November.

2025 production will feed directly into the math for quarterly soybean stocks, which I expect will total 3.245 bb. The Dow Jones survey estimate is calling for 3.296 bb of soybean stocks as of Dec. 1, likely expecting slightly less soybean usage. Both would be the largest Dec. 1 soybean inventory for the U.S. since the first trade war in 2018 and 2019.

From the demand standpoint, we know from last Friday's Fats and Oils report that crush through the first quarter of the 2025-26 marketing year was a record 662 mb. Unfortunately, export demand was significantly lower than normal for the September-through-November period, as China did not begin taking shipments of soybeans until December. My estimate of 442 mb for the period would be the lowest since 2011. The wild card is the seed and residual usage, which I have estimated at 200 mb (similar to the first quarter of 2024-25). Total first-quarter soybean disappearance of 1.303 bb (1.252 bb implied by the Dow Jones survey) would be the lowest for the first quarter of a soybean marketing year since 2019. The slow start to export demand has many wondering if USDA will again reduce their forecast from an already 13-year low 1.635 bb. The average trade guess of 301 mb of soybean ending stocks for 2025-26, despite the anticipated production cut discussed above, would certainly point to decreased export demand as a possibility.

The world soybean balance sheet will again play a key role in justifying changes made to the U.S. balance sheet. Essentially, any drastic cut to U.S. export participation would need to be explained on the world sheet by either higher exports from South America or other competitors, or lower world imports. For Monday's report, given the very good growing conditions in Brazil through December, many traders will likely be expecting USDA to increase its already record forecast (175 mmt) for 2026 production. In the case of higher production, higher exports out of Brazil would also be a fair assumption. On the bottom line, analysts surveyed by Dow Jones expect 123.1 mmt of soybean ending stocks in 2026, up 700,000 mt from USDA's December estimate, but still slightly lower year-over-year.

WHEAT

The wheat market showed signs of bullish momentum at the close of 2025. But as was the case for most of the past year, bearish traders have looked at rallies as selling opportunities, with Chicago markets setting their latest contract lows just last week. Meanwhile, Kansas City wheat futures have shown a bit more resilience among winter wheat prices, spurred by recent weather risk across the central Plains and challenging long-term resistance in early January.

On Monday, USDA will give the spotlight to the U.S. winter wheat crop with its 2026 Winter Wheat and Canola Seedings report. Given the challenging price and profitability environment for wheat producers in 2025, analysts are expecting to see another yearly decline in winter wheat acreage in 2026. The average trade estimate comes in at 32.3 million acres (ma), which would be the lowest in six years, if true, and the fourth lowest within NASS records, which go back to 1909.

Returning to the old-crop 2025-26 season, analysts are expecting Dec. 1 wheat inventories in the U.S. to total 1.636 bb, which would imply (accounting for imports into beginning supply) just under 500 mb of wheat disappearance through the second quarter, the largest second-quarter wheat demand since 2019, if true. This is thanks largely to a steady export program through the first half of the marketing year, with commitments running 18% ahead of the same point in 2024 to end 2025. Bullish traders on Monday will be arguing for an increase to the 2025-26 wheat export forecast. But given that the last few weeks of sales have been sluggish and world competition is high, I wouldn't be surprised to see USDA hold off on any meaningful changes, barring a surprise in its quarterly stocks survey results. 2025-26 wheat ending stocks are expected, on average, to fall slightly to just below 900 mb (901 mb in December), though opinions are very evenly split.

In the world wheat markets, the thought for Monday is we will very likely see another revision higher to world production for the 2025-26 season, and subsequently, analysts surveyed by Dow Jones are expecting to see an increase of 1.3 mmt in world stocks to 276.2 mmt. World production and ending stocks have risen sharply over the past three WASDE reports, and 276.2 mmt would be the largest in five years for world inventory. The country to watch on Monday will be Argentina, where USDA's December production estimate of 24 mmt has fallen behind local agency estimates. The Buenos Aires Grain Exchange, for example, is expecting the 2025-26 wheat crop in Argentina to total 27.8 mmt, a new record, if true.

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Join us for DTN's post-report webinar at 12:30 p.m. CST on Monday, Jan. 12, as we discuss USDA's new estimates in light of recent market events. Questions are welcome, and registrants will receive a replay link for viewing at their convenience. Register here for Monday's USDA January reports webinar: https://www.dtn.com/….

Rhett Montgomery can be reached at rhett.montgomery@dtn.com

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