Corn extends rally on USDA’s unexpected large supply cuts

Corn futures extended the past week’s upswing and notched a four-week high after USDA sharply reduced its forecast for U.S. and global stockpiles in 2025, indicating supplies may not be as burdensome as thought previously.

Soybeans briefly rallied after USDA unexpectedly left its 2025 harvest projection for Brazil’s crop unchanged at 169 million metric tons (6.21 billion bushels). Analysts expected a slight increase. Wheat futures sustained modest gains after USDA lowered its U.S. stocks forecast more than expected.

USDA slashed its estimates for U.S. corn stockpiles at the end of the 2024/25 marketing year next summer to 1.738 billion bushels, down 10% from a November estimate and 22 million bushels below 2023/24 ending stocks. Analysts expected a reduction closer to 1.906 billion bushels.

The tighter corn stocks outlook reflects strong demand from a few major users. USDA hiked its 2024/25 export forecast by 150 million bushels to 2.475 billion bushels, which would be an 8% improvement over 2023/24 exports. USDA also raised estimated food, seed and industrial use.

For soybeans, USDA kept 2024/25 U.S. ending stocks unchanged at an estimated 470 million bushels, but it also raised global stockpiles to a record 131.87 MMT (4.84 billion bushels) from 131.74 MMT.

In midday trading, March corn futures rose 4.75 cents to $4.4650 after spiking to $4.47 shortly after the USDA report, the contract’s highest intraday price since November 8. January soybeans gained 2.25 cents to $9.9225, while March SRW wheat rose 2 cents to $5.6075.