USDA released a mountain of data Tuesday, with headlines dominated by a large cut to winter wheat production in 2026 that has the U.S. on track to harvest its smallest crop since 1972. Still, there were plenty of additional details that deserve attention.
Abandoned wheat acres
Winter wheat futures notched limit-up gains following a large drop in winter wheat production – down 350 million bu. from year-ago on a lower yield (47.6 bushels an acre, down 7 bushels from last year) and a drop of 3.5 million harvested acres from year-ago. A harvested area of 22 million acres implies abandonment of around 10.5 million acres, or around a third, given plantings of 32.4 million acres.
Corn balance-sheet tweaks
On the surface, the data around corn was mostly as expected, though cuts to new-crop demand were noteworthy. Many analysts have questioned USDA’s feed and residual number, as being too high given historically low cattle numbers. As such, many may deem the 100-million-bushel new-crop cut to feed and residual use, not that exciting. It does, however, indicate expectations of lingering growth challenges for the U.S. cattle herd. The 150-million-bushel slash to new-crop exports may be the bigger topic. While exports have been exceptional throughout the current marketing year, the 5% cut reflects a more normal export season amid an outlook for a slightly smaller crop and tighter domestic balance sheet.
Tighter new-crop soybean balance sheet
Unsurprisingly, the government reduced old-crop soybean exports by 10 million bu. to 1.53 billion bu., as purchases from China have been mostly a miss since harvest began in South America. However, new-crop exports were pegged at 1.63 billion bushels out of the gate, while crush demand was slated at 2.75 billion bu., up 120 million bu. from the current marketing year. A bigger soybean crop and an increase in biofuel demand are surely drivers. These demand increases put new-crop ending stocks in a tighter-than-expected position, though USDA noted that the forecasts are “highly tentative” given spring plantings are still well under way. A potential increase in soybean acres could change the landscape for soybeans rather quickly.
Wheat demand
The wheat balance sheet included some demand changes that helped offset the supply shock. USDA trimmed feed & residual use by 20 million bu., and a 135 million bu. decrease in exports amid limited supplies due to historically low production in 2026.
Cotton carryout
New-crop cotton ending stocks were well below pre-report expectations due to a 300,000-bale increase to exports during the 2026-27 marketing year despite lower supplies. Meanwhile, the projected average farm price jumped 10 points to 73.0 cents.
Keep an eye on Argentina
Global production changes were mostly as expected, with the Argentine corn crop gaining the largest focus in recent weeks as independent analysts and the U.S. ag attaché have made sharp increases amid increased acreage. USDA increased its Argentine corn production forecast by 7 MMT but continues to hold the most conservative view of the crop. Brazil’s corn production estimate was also increased by 3 MMT to 135 MMT as recent rains have proven favorable for a mostly later planted safrinha crop. New-crop global carryover was generally well below analysts’ pre-report estimates, though the May report served as the initial baseline going forward. Changes are likely as production figures are better understood.