USDA maintains productivity forecast for the 2025 corn crop year

After several weeks without official information from the Department of Agriculture, and with the market having become accustomed to relying solely on this information, the USDA has once again updated data regarding the US supply and demand. During this situation, involving the shutdown, many private companies attempted to update data, some news agencies sought a consensus of information, and some continued to suggest that this year’s US productivity would be much lower than indicated in the August and September reports. Cuts below 180 bushels/acre were suggested. The Department did not follow the market, maintaining high productivity and a huge US crop. On the other hand, demand projections remained quite high, including super exports in this 2025/26 business year. Now, the market is focused on 2026, the consequences of the trade agreement, and the confirmation of the USDA’s strong demand projections.

It is always quite difficult for the Department of Agriculture to change its crop research methodology and/or ignore the production records being made by its growers in the government system. This is in a very comfortable situation, that is, there were no unfavorable weather conditions that could reverse the field research registered in August and September. Some private companies have modified their productivity research methods, including those that hold Crop Tours to publicize their surveys. Moreover, there are records of some productivity losses in states such as Ohio and Indiana due to pests. However, it seems that the productivity gains in other states compensated for the reduction in this region.

So, the USDA updated its productivity forecast to 186 bushels/acre compared to 186.7 bushels/acre in the last report. This reduced production from 427 to 425.5 million tons, still a bumper crop. This data will still be finalized in January and, until then, further adjustments may still occur. The other expected adjustment in the report for the United States data was the carryover stocks from 2024/25 to 2025/26, which rose to 38.9 million tons, according to the September quarterly stocks report, even with strong exports of 71 million tons.

Adjustments were then expected for the demand data. The big adjustment came from exports projected at an unprecedented 78.1 million tons, almost 3 million above the previous projection and being the factor that contained a greater increase in stocks. Now, the projected stocks of 54.7 million tons is the highest since 2018.

With limitations on expanding the demand projection and, now, with the export projection already quite high, the new indicators for rising prices become more limited. Initially, as weekly exports are released again, this local pace can be adjusted to the projection. In addition, the race for the 2026 crop continues, focusing on planting. At this point, the trade agreement and resumption of soybean purchases by China seem to be the key factor.

This week, the United States and China are expected to finalize the agreement involving rare earth minerals, which will consequently open the market for soybean flows. Since the announcement of the agreement, China has not yet participated in purchases from this origin and reached seven months in a row without shipments of US soybeans. The unfolding of the announcements suggests that the agreement will be finalized this week and, from then on, China would return to purchases from this origin, at least 12 million tons this business year, well below last year’s 27 million tons. At this moment, there is no reality of purchasing 25 million tons this business year, only 12 million. Of course, some problem in Brazil could generate new movements.

This concept is important to define the planting of the 2026 crop, which begins with a bias toward a possible new area reduction if there are no flows to China or support for local prices. Could there be a new expansion of corn planting due to this scenario?

Regarding China, perhaps the USDA has not had time to make any update due to the alignment of the Chinese government. China is forecasting a record production of 300 million tons, while the USDA maintains its estimate of 295 million tons. Imports are expected to be low in both estimates, and inventories are expected to decline sharply regardless of the trend. By 2026, China will need a new record production; otherwise, stockpiles will continue to fall, forcing the country to resume imports. Europe, by adjusting its demand in the face of very cheap wheat, and Ukraine’s crop with good volumes, even amidst the war, complete the important points of this report.

Argentina, in turn, continues with very weak exports at the moment, below last year’s and outside the year’s target of at least 34 million tons. This decline in Argentine sales offers space for other exporters to fill the gap in volumes until at least March. The Argentine crop is progressing in planting and development, the flooding in Buenos Aires has not interfered with the planting environment, and the losses are material and do not represent losses in production potential, especially since replanting is still fully viable.

Unfortunately, the Brazilian agricultural media does not miss an opportunity to present growers with an erratic view of events. We recently had information suggesting that corn prices would surge at the end of this year, theoretically because it happened this way in 2024, even suggesting that we would have an El Niño event ahead. We really do not know the basis for this type of information presented to Brazilian growers. What is real at the moment is that Brazil still needs to ship 8 million tons to close the business year within a reasonable target, domestic demand remains solid, maintaining prices with some regional movement, the summer crop in the south of Brazil is excellent so far, and neither the exchange rate or CBOT are helping to improve port prices to enable better domestic prices.

The Brazilian corn market is approaching the last two months of the business year with visible difficulties in obtaining credit for growers, an overvalued local currency, and a combination of production costs and market prices that are poor for profitability. Many variables are presented in the Brazilian agricultural media in an attempt to influence domestic prices and bring some optimism to the national agribusiness sector, which seems to be suffering weekly negative impacts on its land structure.

Initially, we must reflect on the climate situation. The crops in Southern Brazil, São Paulo, and south-central Minas Gerais, regions that plant summer corn, have excellent development conditions. The Southern Brazilian crop is now entering its critical phase, pollination and silking, in which variations in potential productivity may arise. But, for now, there are no factors to report negatively.

Besides, the central-northern region of the country has problematic variables for the summer corn and soybean crop. For the summer corn crop, northern Goiás and Minas Gerais and Matopiba. Only Tocantins has been in a better climate condition so far. This should delay the planting of summer corn a little longer, which we can assess at this time. In the case of soybeans, eastern Mato Grosso, northern Goiás and Minas Gerais, and a good part of Matopiba are suffering from irregular rainfall or it has not arrived yet. In the case of soybeans, which are earlier-maturing and already blossoming, we may see an earlier cycle, opening up a window earlier for second-crop corn. In areas still experiencing planting difficulties or requiring replanting, a significant portion of the second-crop corn window may be lost and replaced by sorghum.

It is not yet possible to measure this situation in percentages or volumes. However, the inability to plant soybeans due to lack of rain could increase the area planted with second-crop corn due to planting deadlines. Another key point is that the current climate situation does not have to do with La Niña; that is, the phenomenon has not yet solidified. There is some cooling of the central Pacific waters, but without the phenomenon becoming established. Therefore, we are in a neutral climate, which can also bring problems, but with greater difficulty in predictability. Currently, there is no forecast for an El Niño in NOAA’s assessments.

The crop in southern Brazil is attempting to adjust prices according to the unfolding weather and wheat conditions. Wheat harvests in Rio Grande do Sul with prices below BRL 60 are beginning to influence corn trading, with deliveries in January/February at BRL 62/65. Port levels at BRL 67/68 for February are not helping prices either in the interior for this period. Consequently, the entire Southern region is finding no room for price highs, with repercussions in Mato Grosso do Sul and São Paulo.

The summer crop in the Southeast is expected to be a little later, which could really help prices in January and March for some seasonal recovery. The issue is that there is still plenty of corn and sorghum from 2025 to sell, warehouses need to be cleared, there are few soybeans to generate cash at the moment, and any price improvement will bring offers. Thus, some price movement at this turn of the year is perfectly normal and bearable for the domestic market. However, domestic highs offset the low port prices and limit export shipments.

The Midwest is trying to get out with volumes for December and January, where the trading companies’ buying points are located. However, ethanol plants seem positioned, there are always regional domestic demands, and exporters have the price benchmark based on port realities. Of course, there are logistics commitments that will have to be met at the end of this business year, and they will be done with corn.

In Matopiba, the planting of soybeans and the planting window for the 2026 second crop are starting to cause concern. Prices have stalled their decline even with harvests progressing in SeAlBa. The delay in planting the 2026 second crop will lead the region to have better supply volumes only in June. In this case, there is a long supply path in the first half of the year to be evaluated by the regional consumer market, even more so with two new ethanol plants next year.

Brazilian exports have now reached 34.1 million tons, a good pace for a year of poor port prices. Now, December and January would need to account for 8 million tons to reach the projected 41 million. December has only 680,000 tons committed so far. Therefore, believing that prices can rise with high domestic stocks and with the summer corn crop going very well still seems like an unfounded projection.

Tags: wheat, crop, China, forecast, exports, Argentina, corn, productivity, USDA, carryover stocks, Brazil, prices, soybeans, US, Production