USDA Downgrades US Corn Supply Forecast for 2025-26 Crop Year

The USDA has forecast a lower-than-expected national corn supply in the US for the next year, despite farmers planting more grain this spring due to uncertainty about Chinese demand for soybeans. The agency predicts 1.8 billion bushels of corn by September 1, 2026, below the expected 2.02 billion bushels. Soybean stocks are also expected to be lower at 295 million bushels, compared to the 362 million predicted by analysts.

The U.S. Department of Agriculture (USDA) has released its latest Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports, indicating a lower-than-expected national corn supply for the next year. Despite farmers planting more grain this spring due to uncertainty about Chinese demand for soybeans, the agency predicts 1.8 billion bushels of corn by September 1, 2026, below the expected 2.02 billion bushels [3]. Soybean stocks are also expected to be lower at 295 million bushels, compared to the 362 million predicted by analysts [3].

Corn futures for July delivery fell 1.3% to $4.49 1/2 a bushel on the Chicago Board of Trade on Wednesday, with analysts anticipating that the USDA will forecast a record-sized corn crop in its WASDE report next Monday [1]. The USDA's latest estimates suggest that the 2025/26 U.S. corn production will rise to 15.8 billion bushels, which would exceed the previous record set in 2023 of 15.34 billion bushels [1]. However, this record production is expected to be less than the 16.5 billion bushels predicted by some analysts [3].

The USDA's lower corn supply forecast is attributed to a decline in the expected yield, which is projected to be around 181 bushels per acre, slightly lower than the 183 bushels per acre estimated in the April WASDE report [3]. This decrease in yield is likely due to concerns about weather conditions and the potential impact of the ongoing trade negotiations between the U.S. and China on soybean demand [1].

The lower-than-expected corn supply is expected to have significant implications for the U.S. agricultural market. Corn prices are likely to increase, putting pressure on livestock feed costs and potentially impacting the overall cost of production for farmers. Additionally, the lower corn supply may lead to increased exports, as the U.S. seeks to maintain its position as a major global supplier of corn [1].

In the coming weeks, investors and financial professionals will be closely watching the USDA's weekly export sales report and the Commitment of Traders report from the CFTC to gain further insight into the potential impact of the lower corn supply forecast on the market [1]. The ethanol producer Green Plains Inc. will also release its first-quarter earnings report on Thursday, which may provide additional context on the demand for corn in the ethanol industry [1].

References:
[1] https://www.morningstar.com/news/dow-jones/2025050710344/corn-futures-fall-on-projections-for-record-sized-crop-daily-grain-highlights
[2] https://www.tradingview.com/news/DJN_DN20250507010344:0-corn-futures-fall-on-projections-for-record-sized-cropdaily-grain-highlights/
[3] https://www.dtnpf.com/agriculture/web/ag/news/article/2025/05/08/usda-kicks-growing-season-unveiling