Key Takeaways:
CBOT corn rose 2 percent, soybeans gained 1 percent and wheat rose 3.3 percent after the USDA's July WASDE report tightened supply forecasts across all three crops.
"The report is an overall bullish report that should support prices in the short term," Jeremy McCann, a broker at Farmer's Keeper, said. "New crop corn ending stocks are coming in at sub-1.8 billion bushels, the smallest carryout since 2023-2024."
USDA cut 2026-27 corn ending stocks by 170 million bushels to 1.79 billion, well below the average trade guess, after lowering old-crop stocks by 125 million bushels to 2.02 billion. The agency raised feed and residual use by 150 million bushels to 6.35 billion, a move several analysts questioned. Soybean ending stocks held at 310 million bushels, unchanged from June but below expectations, as USDA raised exports by 30 million bushels on stronger global demand. Wheat ending stocks fell 22 million bushels to 722 million, down 22 percent from a year ago.
The tighter balance sheets leave little room for weather shocks. Corn at 1.79 billion bushels is approaching the 1.5 billion threshold that traders consider a flashpoint for price spikes, while wheat's 50-year low in production comes as Russian export disruptions from the Ukraine conflict add supply-side risk. The next key data point is the August USDA report, which will include the first survey-based corn and soybean yield estimates.
USDA left the 2026-27 corn yield unchanged at 183 bushels per acre, with total production at 16 billion bushels. The agency boosted feed and residual use by 150 million bushels to 6.35 billion, a 17 percent year-over-year increase that Arlan Suderman, chief commodities economist at StoneX, called indefensible given animal units justify only a 2 percent to 3 percent increase. Global corn ending stocks fell to 275.3 million metric tons, down 6 million from June and nearly 23 million below last year, driven by a 3.7 million-ton reduction in EU production from record heat and drought in France.
USDA pegged 2026-27 US wheat production at 1.536 billion bushels, the smallest since 1970-71, though above the average trade guess of 1.525 billion. Winter wheat production fell 39 million bushels to 990 million, with cuts to Hard Red Winter and Soft Red Winter varieties. The rally accelerated on news that Ukraine struck Russian tankers in the Sea of Azov, disrupting shipments from one of the world's largest wheat exporters. "The expectation was that it's just for the weekend," Suderman said. "If the market truly believed it was a permanent shutdown, we would have been up the limit."
Soybean production rose 40 million bushels to 4.475 billion on higher harvested area of 84.4 million acres, up 700,000 from June. The yield held at 53 bushels per acre. China bought 9.7 million bushels of US soybeans on Friday, bringing the weekly total to 32 million bushels, as Beijing works toward its 25 million-metric-ton purchase commitment. Global ending stocks eased to 124.2 million metric tons from 124.9 million in June, below the average trade guess of 125.2 million.
This article is for informational purposes only and does not constitute investment advice.
