Quiet Before the Storm: Markets Wait on the Winter’s Biggest USDA Call

The positive week ended quietly with markets drifting on both sides of unchanged in a low volume trade as both speculators and hedgers got positioned ahead of Monday’s major USDA report. News remains consistent with non-threatening weather in South America and just enough Chinese bean buying to keep the bull’s attention but not enough to produce a meaningful rally. The USDA/WASDE numbers will set a baseline for US and world trade to work with as Brazil’s bean harvest starts in earnest this week while US farmers and bankers work through the mix of what the US farmer will be planting this spring.

News and Notes:

• SA weather for the next 2-weeks remains non-threatening with dry conditions in place for the start of Brazil’s most northern bean harvest with a healthy mix of rain, sun, and normal temperatures for the developing crops in southern Brazil and Argentina. Record yield potential has been cited in all public and private crop estimates in both countries as minimal crop stress has been experienced in the southern hemisphere this growing season. SA is on pace for their third straight record total yields.
• The daily new crop charts are on Page 2 and show this week’s modest bounces back into the middle of the trading range for corn while beans and wheat are struggling to mount any bounce from the lower ends of their ranges. The large bean fund length heading in Brazil’s harvest is major concern.
• The USDA pre-report estimate chart is below and shows the modest yield cuts (2 BPA for corn and .3 for beans) that will be a big focus when the report is released. Other areas of interest will be how much the USDA increases the potential crop size for both corn and beans for Brazil and Argentina and how the USDA addresses the missing 450 MBU+ of missing Chinese bean purchases due to the trade war. One rumored concern is the low silage harvest which could increase harvested corn acres 700,000-900,000 and add 140-150 MBU to US corn ending stocks. Unless the USDA makes a major cut in US corn and bean yield, it is hard to see the report having a long-tern bullish impact on prices.
• The military takeover of Venezuela by the US last weekend did not upset the energy markets very much with crude still stuck between $56-$60 a barrel. The diesel and crude charts could be interpreted to have had a mini-breakout last week, so filling up your fuel tanks for the spring and booking some summer needs on your diesel is recommended.
• Weekly Changes: Corn +8 1/4 (March ‘26), +5 1/2 (Dec ‘26), Beans +16 (May ‘26), +13 1/2 (Nov ‘26), Wheat +9 3/4 (July ’26), Crude +180, Diesel +199, Dow +1110, US Dollar +732, Cattle -227, Feeder Cattle +463, Hogs +120, Cotton +40, Milk -21 (14.86).

Whatever I write in this comment will probably be irrelevant after Monday’s 11am CT USDA report release. The January report is the biggest report of the winter (August is the biggest of the summer) and the USDA and WASDE will update every column on their spreadsheets from the 2025 “final” yields to the expected size of the South American crops. Demand is always a moving target but with negative adjustments expected for US exports in beans and increased harvested acres for corn, the general thought is that the USDA will have a hard time cutting yield enough to offset those bearish adjustments. Please put in overhead old and new crop sales targets with your buyers if we do get a bullish surprise to take advantage any post-report rally, as the calendar turns bearish in the weeks to come as Brazil’s bean harvest gets serious. Opening calls are mixed with a dull trade expected until the USDA releases the report. Have a great Sunday.