The markets recovered from losses early in the week to close 2 cents higher in the March contract and 3 cents higher in the May and July contracts. Support from the soybean market on news of additional export business was the catalyst this past week. The funds ended the week short 42,613 corn contracts and long 131,153 soybean contracts.

President Trump’s Truth Social post on Wednesday following a phone call with Chinese leader Xi Jinping triggered a bullish response in the soybean market. Trump said he encouraged Xi to have China purchase more U.S. ag goods, including increasing 2025-26 soybean purchases from 12 million metric tons to 20 million metric tons. He also reiterated that China has committed to buy 25 million metric tons of U.S. soybeans for 2026-27. Following these comments the soybean market managed to rally 50+ cents in most of the old crop contract months. While this didn’t pull corn as much as I would normally anticipate, it did add strength and help raise the support levels in the corn charts.

The USDA will release their February Crop Production report on Tuesday. Estimates are listed below.

USDA 2025/26 US Carryout (Billion Bushels)

USDA 2025/26 World Carryout (Million Tonnes)

USDA 2025/26 South American Production (Million Tonnes)

Brazil soybean harvest is slightly behind last the five-year average while first crop corn harvest is about 5% behind the five-year average. Brazil’s second crop corn planting is 3 % behind the five-year average.

Weather in Brazil has been favorable with beneficial rains that will help soybeans but may slow some second crop corn planning. In Argentina, most of the corn and soybeans remain dry with limited rain in the short-term forecasts. The 7-day forecasts are calling for beneficial rain, but coverage is still uncertain.

The US acreage situation is what is at the forefront for the corn market right now. With the E15 situation unsettled, there is no bullish news on corn demand that wasn’t in place last year. For now, it’s up to the markets to persuade corn acres to bean acres to avoid oversupplies in 26/27.

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Corn had an up and down week of trade with the lack of fundamental news in the market. The announcement of the next chairman of the Federal Reserve and forecasts for wetter weather in Argentina pressured the markets to end the week. March, May and July corn all ended the week 2 cents lower. The funds ended the week short 74,596 corn and long 14,794 soybean contracts.

Late last week President Trump picked Kevin Warsh to be the next chairman of the Federal Reserve which resulted in some short-term pressure on the market. Following the announcement we immediately saw strengthening of the US dollar, driving grain prices lower. Expectations are for Warsh to be less aggressive on rate cuts which will make the dollar stronger and make US grains less competitive.

Argentine weather has become more of a concern as radar shows a crop that has declined in the vegetative index over the last month which is expected to impact the top end yield potential. Forecasts remain dry for the next week, but extended forecasts are calling for a return to normal rain in the two-week timeslot. Brazil on the other hand has had sufficient rainfall in the growing areas resulting in improved crop conditions.

The markets have rallied from the post WASDE low, but with no indications that supplies are going to tighten in the coming year it will struggle to test the upper pre-report levels. Historically the corn market rallies in February as the market tries to hold or buy acres heading into spring. There are no indications that it needs to keep acres this year. I have run projections using 94.8 million corn acres (down 4 million from 2025), 181 bushels per acre (down 5 bpa), decreasing feed use by 100 million bushels and increasing exports by 100 million bushels, we still have a 2026/27 carryout of 1.8 billion bushels. With stocks that plentiful we should not see an acreage battle in February, and we have plenty of room to support more demand before the market needs to react.

The extremely cold weather that we have experienced recently has had some short-term impacts on the markets that could linger all season. The extreme cold resulted in ethanol plants having to reduce rate by as much 50% due to natural gas curtailments. The reduced grind cannot be made up, which will add more bushels to the balance sheet. On the export side, there have been some major disruptions to the river systems as frozen conditions and low water levels on the Illinois, Ohio and Mississippi rivers have crippled barge logistics. Barges not being able to ship or shipping lower volumes due to low water leaves a lot of bushels that don’t make it to the export market that has been a strong buyer. Everyday that these shipments fall behind is one day closer to South American harvest. Gulf logistics that are tapped out and will not be able to make up for that business later as South American competition grows later in Q1 and Q2.

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It was a quiet week in the markets until Friday mornings export sales were released. March, May and July futures all ended the week 6 cents higher. The funds jumped in and bought 40,000+ contracts of corn on Friday ending the week short 64,367 corn contracts and long 23,624 soybean contracts.

A surprisingly large export sales report showed sales at 158 million bushels for the week with 50 million bushels to unknown destinations, 32 million to Japan and 30 million to South Korea. This was the largest single week for corn sales since March 2021. Last week’s sales increased the US pace to 3.46 billion bushels vs. the USDA’s forecast of 3.20 billion bushels.

Argentina crop conditions continue to deteriorate according to Buenos Aires Grain Exchange (BAGE) who is the premier organization in Argentina responsible for monitoring, analyzing and forecasting crop production. They updated their crop conditions last week and it continues to show a sharp fall out on conditions as dryness persists and heat moves in the coming week. They are still expecting a very good crop, but we are seeing the top end of production removed and may not see the extreme record that had been in play. This is important as the size of this crop drops the size of the US export program climbs.

The corn industry suffered a setback last week when the US House removed the Year Round E15 language from a funding bill. There was a lot of hope from the biofuel industry that this would slide through as part of a must-pass bill. A Year Round E15 waiver would clear the way for but not guarantee a major expansion of the E15 blend. Only 1.5% of the US fuel pumps are cleared to dispense E15 blends currently and most of them are in the Midwest. Estimates on how much corn demand would increase if E15 became available year-round range from 500 million to more than 2 billion bushels. An E15 expansion would take years to build infrastructure and consumer demand, but would support industry and producers

We have bounced about 40% off the low made following the January WASDE and could test the 50% mark this week. If weather continues to be negative in south America and exports remain strong we should have our lows in for the time being. I am not suggesting we cant move lower, but I look for things to stabilize in the $4.25 to $4.35 range for March futures for the next few weeks. The markets historically have a little rally in February, but it may be hard to rally much with a 2 billion plus carryout sitting on its back.

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The markets have been waiting for some direction, and they got it in last week’s WASDE! The expectations were for lower stocks and yield, and the government again went the other way. Corn prices collapsed to close 24 cents lower on Monday. After a few days of lower trade, they managed to stabilize and mount a small rally to end the week, 21 cents lower in the March contract and 22 cents lower in the May and July contracts. The funds ended the week short 98,158 corn and long 27,485 soybean contracts.

There were a few bearish surprises, with the biggest being an increase in corn yield of .5 bushels per acre to put a new record yield of 186.5. The USDA also raised harvested acres by 1.3 million. The combination of higher yield and acres resulted in a production increase of 269 million bushels from December to 17.021 billion, a new record high that well exceeds the previous record set in 2023 by 1.7 billion bushels. If the increase in production wasn’t enough to send the markets lower, the USDA made sure it went that way by increasing December 1 stocks by 300 million over the average trade guess while leaving ethanol and exports unchanged. The only positive to demand was an increase in feed and residual use by 100 million bushels which I believe should have been lower based on cattle numbers.

USDA 2025 Harvested Acres (Million acres)

USDA 2025 Yield (Bushels per acre)

USDA 2025 Production (Billion Bushels)

USDA 2025/26 US Carryout (Billion Bushels)

Last year’s report caught the trade by surprise dropping corn yield.  This year they caught us by surprise by raising yield and acres. Having been in this business for close to 30 years I guess this is something I should be accustomed to, but optimistically don’t expect to happen. The difference in the two years is that there were a lot of signs pointing to higher acres this year and we had no reason to expect lower yield given what we witnessed this fall.

Agree or disagree, these are the numbers we will be dealing with for the next year. The market will now turn its attention to South American weather and planting intentions in the US this spring. I don’t see a lot of room for demand to increase this year, so the markets job now is to discourage corn acres this spring if we want to see next year’s carryout under 2 billion bushels.

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The corn market posted a nice rally last week as it continues its up and down trend while searching for something to give it direction. The corn market has spent the last 6 months in a narrow trading range with the center at $4.45 in the March contract. March, May and July futures all ended the week 8 cents higher. The funds have stepped to the sideline heading into Monday’s report as they are long 170 corn contracts and long 67,807 soybean contracts.

We have finally made it to report day! Today at 11am the USDA will release the January WASDE which is one of the more highly anticipated reports of the year. There will be a lot of data to digest, but the biggest focus will be on yield and ending stocks. Estimates for today’s report are listed below.

USDA 2025 Harvested Acres (Million acres)

USDA 2025 Yield (Bushels per acre)

USDA 2025 Production (Billion Bushels)

USDA 2025/26 US Carryout (Billion Bushels)

Last year’s report caught the trade by surprise dropping corn yield 4bpa (183 to 179).  This fueled a rally that continued into Feb and prompted a massive amount of selling that dropped spreads and basis promptly.

While most are looking for a drop in corn yields, it stands to reason the USDA could lower demand on a lower production number. Regardless, if we could get stocks under 2 billion bushels, this corn market might find some life at any hint of weather issues, either in the US or South America.

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