Fundamentally Speaking

One key takeaway we have from Monday's WASDE report is how optimistic the USDA is on both U.S. corn and soybean demand despite ongoing global trade tensions and record South American production of each crop.

Higher U.S. corn seedings this year along with a projected record high yield of 181.0 bushels per acre (bpa) are seen resulting in all-time high corn output this fall, while a drop in soybean planted area offset to some extent by a forecast of also record yields for this crop at 52.5 bpa, topping the old peak seen back in 2016.

The net change between the new supply and demand figures shows 2025/26 ending corn stocks pegged at 1.80 billion bushels (bb), up from this year's 1.415 bb, though about 200 million bushels (mb) less than the trade expected.

Soybean stocks for the coming year are at 295 mb, down from 350 mb this year and well below the average pre-report guess of 375 mb.

Along these lines, this chart shows the USDA's May WASDE old crop and first new crop stocks-to-use ratios for U.S. corn and soybeans.

The latest 2024/25 stocks-to-use ratio for corn is 9.3% and that is the second lowest old crop corn ratio for the May WASDE since 2014 and well off the 14.2% estimated a year ago.

This apparent bullish turn of events is not reflected in prices however as the July contract this week traded at lowest levels since October near $4.37 vs $5.12 per bushel a year ago.

As for soybeans, the old crop stocks-to-use ratio is projected at 8.0%, down from the first WASDE projection this season at 10.2% yet July 2025 beans as of May 15 are trading near $10.53 vs. $12.20 a year ago.

The new crop stocks-to-use ratio at 6.7% is actually the second lowest initial bean stocks-to-use ratio since 2012.

Whether the final 2025/26 stocks-to-use ratios will come above or below these projections remains to be seen and will be a function primarily of weather and future demand.

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