Monday, Jan. 12, hosts one of the biggest report days of the year, providing an update on USDA’s production figures for 2025 and a look at how demand held up in the first quarter of the marketing year.
The record long government shutdown led to a delay in getting worthwhile objective yield data in the USDA production figures. That means actual test weights were likely not included to the usual degree in the November production estimate, which saw USDA peg the corn yield at 186 bu. per acre despite lower population and ear counts found in plots. We anticipate a 3.3 bu. per acre cut to yield and maintain our Crop Tour estimate of 182.7 bu. per acre. Soybean pod weights were seen as rather light given a record amount of pods. We maintain our Crop Tour yield of 53 bu. per acre, which USDA matched in November.
A Bloomberg survey found analysts, on average, expect the corn yield to fall 2 bu. to 184 bu. per acre, while soy yields are seen falling to 52.7 bu., a negligible cut. That cut to corn production would not be enough to make a difference in the balance sheet as those bushels would likely fall off demand. While corn demand has run at a record pace over the past several months, USDA’s demand estimates are still too lofty. If the corn yield estimate falls near 180 bu. per acre (near the 2024 final yield), that would quickly shift the market dynamic from a supply market to a higher-priced demand market.
One key to watch in this report will be how feed and residual use held up in the first quarter of the marketing year. Historically, around 40% of the annual feed and residual use happens between September and November, so the implied figure in Monday’s reports will give a good indication of how the annual estimate holds up. The soybean balance sheet has far less margin due to the light acres planted in 2025. Most soy use is known between exports and crush, and residual use typically does not make much difference in the balance sheet. If there is a cut to the soybean yield, which seems unlikely given how the cash market has traded, it could quickly ignite a rally, but we are inclined to think a soybean surprise is unlikely on Monday.
Wheat stocks will also receive an update but will likely take a backseat to the corn and soybean estimates. The average analyst expects stocks to come in at 1,637 million bu., above last year’s report of 1,573 million. Strong wheat production has weighed heavily on the supply side, and while exports have been at a five-year high it will be a tall task for them to push wheat stocks to more price-bullish levels. More time is required to work through the surplus of wheat not only in the U.S., but also globally. Wheat seedings for the upcoming crop year will be updated in a separate USDA report on Monday. Analysts see winter wheat acres declining, with the average estimate at 32.4 million acres. Large global and domestic supplies have resulted in minimal price opportunities for producers to hedge a profit, thus disincentivizing planted acres.
