USDA’s Corn Bombshell: How 400 Million Bushels Changed the 2026 Outlook Overnight

The rest of the world did not react any better overnight than the US did post-report on Monday as prices were under pressure most of the session with beans and corn adding to Monday’s losses. The discovery of an extra 400 +/- MBU of corn by the USDA in the 2025 US crop has thrown cold water on any bulls dreams heading deeper into 2026 as the pre-report oversupply of world grain and soy became even more burdensome. World weather and low prices stimulating additional demand are the only two obvious avenues to shrink supplies, but with current world trade tensions, government policy and benign weather, a quick solution to the problem is not available.

News and Notes:

• Argentina is forecast to get some additional rain for the drier corn regions in the next week while Brazilian bean harvest is approaching 5% and well ahead of last years pace. SA weather remains non-threatening, and their crop yields are likely to increase in upcoming government reports to further complicate the world oversupply issues.
• The daily December corn chart is on Page 2 and shows the collapse of price since Monday’s USDA report release. The black dotted line at the bottom is the August harvest low of $4.40 ¾ which is also a few cents above the contract low. That level is the final line in the sand for prices for support as the post-report crash sent prices well below all moving average and technical support. The funds still own just a modest short position but with SA growing season left and US acreage decisions still in limbo, a choppy sideways trade should unfold in the weeks ahead with today’s close at $4.45 ½ easily within a quick test of the August low.
• China ands Mexico were announced as corn buyers this morning and after Monday’s bean sale announcement, China has now finished over 90% of their obligated US bean purchases from the October trade deal. With Brazil’s harvested bean bushels soon to hit the ports, Brazil’s current 60-70-cent discount in bean price against US prices will grow to $1+ just as China completes their 12 MMT purchase obligations. The US bean export pace will come to a grinding halt within the next few weeks. Corn demand remains stout and should stay strong as prices move lower after Monday’s report. Mexico remains the US’s largest corn buyer.
• One potential bright spot for grain and soy prices is rising metal (silver made new all-time high today) and energy (crude rallied to new 3-month highs today) prices which could lead to a general commodity rally on rising raw material prices. Higher crude and gas prices would increase ethanol and bio-diesel blend margins. Any extra demand is welcome.
• Despite escalation in key regions of the Russian/Ukraine fighting, their grain exports have not slowed, and Russia’s wheat is still very competitively priced in the world market. With Iran’s citizens in revolt, Venezuelan leadership being forced out and no end in sight to the war in Ukraine, world prices have not flinched at the world turmoil as supply chains have not been interrupted.
• Ag Sec Rollins and EPA Director Zeldin are going on a “rural revival tour” starting Thursday in Pennsylvania to get feedback from farmers and tell us how hard they are working to help the ag economy. This roadshow is an obvious attempt to start campaigning to keep the rural vote in President Trump’s favor ahead of the November mid-terms, but unless this administration expands domestic bio-fuel demand with year-round E-85 and restarting the Sustainable Aviation Fuel program, this will be just another political photo op filled with empty promises and hot air.

No one ever likes to hear the term “it could be worse” when they are going through hard times, but the hammer of the USDA report found a way to make things worse for the ag community. The trend of world over-production and the fast bleeding of wealth from the US farm industry is unsustainable. The Farmer Assistance Payments are a band aid on what is now a patient that needs major surgery, and delays and empty campaign promises will only drag out a bad situation. Please talk you’re your trade associations (corn growers, etc.) and your state and federal elected officials, because US policy must change quickly to help us in 2026.