USDA’s May WASDE Report: Record Corn Crop and Tight Soybean

The latest May World Agricultural Supply and Demand Estimates (WASDE) report from the U.S. Department of Agriculture (USDA) has initiated optimism and notice in agricultural markets, projecting a record corn crop for the 2025-26 marketing year alongside tightening soybean stocks.

These key projections highlight evolving dynamics in U.S. grain production and supply, promising a volatile but opportunity-rich year ahead for farmers, traders, and agribusiness stakeholders.

Corn Production Sets a New Benchmark

The headline from the May WASDE report is undoubtedly the USDA’s forecast of a 15.82 billion bushel corn crop in 2025-26 an all-time high for the U.S. This projection assumes an average yield of 181 bushels per acre, also a record, marking a notable increase of nearly 6.4% compared to last year’s harvest. This surge in expected output is supported by U.S. farmers’ plans to plant an estimated 95.3 million acres of corn, the highest acreage in 12 years.

Despite the anticipated large crop, ending corn stocks are forecast at 1.8 billion bushels, a 23% rise from 2024-25 but still below the market’s earlier estimate, which had projected more than 2 billion bushels. USDA’s downward revision of 2024-25 ending stocks by 3.4% to 1.42 billion bushels underscores the complex supply-demand balance that is playing out.

On the demand side, USDA projects total corn use at 15.46 billion bushels in 2025-26, buoyed by strong domestic consumption from ethanol producers, robust export demand, and steady livestock feeding requirements. Exports alone are expected to increase nearly 3% to 2.675 billion bushels, the highest volume since the 2020-21 marketing year. This highlights the continuing global appetite for U.S. corn despite challenges in international trade dynamics.

However, experts emphasize that achieving these record production levels will depend heavily on weather conditions. Cory Bratland, hedge specialist at AgMarket.Net, points out that the USDA’s yield forecast of 181 bushels per acre has never been realized historically, and previous years’ May yield projections have generally been optimistic relative to outcomes.

“If the weather is less than perfect, we could see significant volatility in the market,” Bratland warned, noting that drought conditions in parts of the western Corn Belt remain a serious concern as the growing season progresses.

Soybean Stocks Signal Market Shift

While corn production is set to break records, soybean outlooks are more nuanced with a tightening supply forecast. The USDA projects the 2025 soybean harvest at 4.34 billion bushels, a slight dip from the previous year’s output but aligned with analyst expectations. The average yield is forecast at 52.5 bushels per acre, a modest increase over 2024’s 50.7 bushels.

Most notable in the soybean outlook is the anticipated 16% decline in ending stocks to just 295 million bushels, significantly below the average analyst estimate of around 375 million bushels. This reduction is driven primarily by expectations of increased domestic crushing demand, which is projected to rise by 70 million bushels to 2.49 billion bushels, outpacing the anticipated 35 million bushel drop in exports.

On the global front, soybean supplies are expected to expand, buoyed by a record Brazilian crop forecasted at 175 million metric tons, up 3.6% from 2024-25. Argentina’s crop is slightly smaller at 48.5 million metric tons, down from 49 million metric tons last year. Despite global supply growth, the reduction in U.S. stocks suggests tighter availability domestically, which may support higher prices.

Reflecting these supply-demand shifts, farm-level soybean prices are projected to rise to an average of $10.25 per bushel in 2025-26, up from $9.95 last year. July soybean futures recently surged to an 11-week high on the back of these USDA estimates and renewed optimism around trade relations.

Wheat Faces Oversupply and Price Pressure

Unlike corn and soybeans, the USDA’s wheat outlook paints a more bearish picture. The department forecasts a 10% increase in U.S. wheat ending stocks to 923 million bushels for 2025-26, the highest level since 2019-20. This comes despite a projected decline in production by 50 million bushels to 1.921 billion bushels, higher than market expectations. Exports are expected to slip slightly to 800 million bushels, down from 820 million bushels in 2024-25.

Global wheat stocks are also expected to increase marginally to 265.73 million metric tons, helped by strong production forecasts in Russia, India, the European Union, China, Argentina, and Canada. These gains offset declines in Kazakhstan, Australia, Pakistan, and the U.S., contributing to abundant global supplies.

As a result, farm-level wheat prices are projected to soften to $5.30 per bushel, down from $5.50 in 2024-25. This forecast aligns with recent market movements, including a sharp drop in July Chicago wheat futures to a lifetime closing low following the USDA report.

Trade Developments and Market Responses

The USDA’s May report arrives amidst encouraging signs on the trade front. Reports of a temporary suspension of most tariffs between the U.S. and China have lifted market sentiment, particularly benefiting corn and soybean futures, which extended rallies on expectations of improved export prospects. These developments provide some relief from ongoing tariff uncertainty and concerns about a prolonged trade conflict.

Corn futures showed mixed reactions, with new-crop December contracts gaining modestly while July contracts experienced slight declines after early gains. Soybean futures were more decisive, surging to multi-week highs as investors digested the USDA’s tighter supply outlook. Wheat futures, conversely, declined sharply, pressured by the outlook for ample supplies.

Risks and Outlook for the Growing Season

Despite the optimistic corn production forecast, weather remains the paramount wildcard. The western Corn Belt, which has experienced drought conditions, will require timely rains to support the USDA’s ambitious yield targets.

Even a small yield loss could dramatically tighten carryout stocks, pushing the stocks-to-use ratio below 10%, a threshold that historically signals increased market volatility.

Analysts caution that previous USDA yield estimates issued in May often overstate final yields, underscoring the uncertainty ahead. Should weather conditions falter, supply tightness and price volatility could intensify.

For soybeans, the story is more about balancing increasing crushing demand with shrinking stocks, set against a backdrop of growing global supply. This dynamic will require close monitoring as the season progresses to anticipate price trends and export flows.

Wheat producers may need to brace for continued pressure on prices due to elevated supplies both domestically and internationally, challenging profitability in the sector.

Year for U.S. Agriculture

The USDA’s May 2025 WASDE report sets the tone for a pivotal year in U.S. agriculture, highlighting record corn production alongside tighter soybean stocks and bearish wheat prospects. These projections reflect a complex interplay of supply, demand, weather, and trade factors that will shape market volatility in the months ahead.

Farmers, traders, and agribusinesses will need to navigate these conditions with careful risk management, paying close attention to weather developments and trade negotiations.

While the potential for bumper corn crops offers hope for an abundant supply, tighter soybean availability and challenging wheat markets remind stakeholders that opportunity and risk go hand in hand.

As the growing season unfolds, the agricultural community will watch closely to see how these forecasts translate into reality and how markets respond to the ever-changing landscape.