Prices face pressure as larger U.S. crops expected this year

The U.S. Department of Agriculture’s initial grain and oilseed outlook for the 2025-26 season is rather bearish.

“There are anticipations and expectations that supplies will grow for corn, soybeans and wheat, all placing downward pressure on prices,” said Aaron Ates, agricultural economist with the USDA’s Economic Research Service.

The soy/corn price ratio dipped below 2.3 in September and has remained there, which is a signal that the market is calling for more corn acres and less soybeans.

The USDA is forecasting 94 million acres of corn in the U.S., up from 90.6 million last year.

Average national yield is forecast at 181 bushels per acre, a 1.7 bu. per acre increase over last year.

That will be partially offset by a drop in beginning stocks, but total supply is still expected to rise by 495 million bu.

“This increase in supply is expected to place downward pressure on prices and incentivize feed and residual use of corn in 2025-26,” Ates told delegates attending the USDA Outlook Forum 2025.

Domestic feed and residual demand for corn is expected to rise by 125 million bu. However, exports are forecast to fall 70 million bu. due to stiff competition from South America.

Ending stocks are predicted to rise by 425 million bu., causing the national average farm price to fall by $0.15 to $4.20 per bu.

The USDA is forecasting 84 million acres of soybeans, down from 87.1 million acres last year.

Normal weather should result in an average yield of 52.5 bu. per acre, up from 50.7 last year.

Total supply is forecast at 4.77 billion bu., a 41 million bu. increase.

However, there will be strong demand for the crop, with crush set to rise by 65 million bu. to 2.48 billion bu.

Exports are forecast to rise by 40 million bu. to 1.87 billion bu. despite stiff competition from South America. Brazil is expected to have higher stocks than usual as the U.S. enters its harvest period.

Ending soybean stocks are forecast to fall 60 million bu. to 320 million bu., but the average farm price is still expected to decline by $0.10 to $10 per bu. due to rising global supplies.

The U.S. is expected to produce more soybean oil and meal due to increased crush volumes.

Much of the increased oil and meal production will be consumed domestically, with export markets mopping up the rest.

Ending stocks for both commodities will remain fairly static due to the increased consumption.

South America’s soybean harvest is underway, while Brazil’s safrinha corn is just being planted.

“Their final crop size does have potential to impact prices and ultimately planting decisions here in the U.S.,” said Ates.

Total U.S. wheat plantings are up two percent to 47 million acres, but average yield is expected to fall by 1.1 bu. per acre to 50.1 bu. per acre.

Supply is forecast at 2.83 billion bu., a 32 million bu. increase from last year due to higher carry-in levels.

Wheat demand is expected to remain static, resulting in a 32 million bu. increase in ending stocks to 826 million bu.

The average farm price is forecast to fall $0.05 per bu. to $5.50.

Argentina, Australia and Canada are expected to have similar wheat crops as last year, while European Union production is forecast to rebound after hitting a 17-year low in 2024-25.

One delegate in attendance took issue with the forecast increase in corn feed and residual demand, noting that factors such as avianflu, a declining cattle herd and reduced imports of live cattle and hogs from Mexico and Canada would seem to suggest otherwise.

Ates reminded the delegate that the category includes “residual” demand and noted that the USDA can’t assume the avian flu outbreak will continue unabated.

“The media would run crazy with that, so we have to assume there will be a resolution to these things,” he said.

Another delegate wondered if corn harvested area should be increased because the amount being used for silage is on the decline. He said the roughage market has been swamped by a huge hay crop and declining hay exports.

Ates said it would be irresponsible for him to change those numbers based on rumours.

“We can’t develop our forecast based on conjecture or what we may be hearing,” he said.

Tags: wheat, soybean meal, forecast, yield, stocks, exports, corn, USDA, soybean oil, price, soybeans