Despite the temporary suspension of full U.S. Department of Agriculture (USDA) reports due to the government shutdown, market analysts have continued to gauge the grain markets, confirming a prevailing concern: large grain supplies are currently in storage. This view is supported by trade analyst polls and carryover data from previous reports, suggesting minimal changes to the overall supply-heavy narrative for corn and wheat.
Farm Director KC Sheperd spoke with Allendale’s Rich Nelson to break down the trade’s expectations for key commodities and discuss the missing data points crucial for farmers.
Corn: Supplies Are Up, Demand Questions Remain
The corn market’s outlook remains largely mechanical, with stocks expected to rise due to past reporting surprises.
- Stocks Carryover: The market is still absorbing the surprise from the end of September’s quarterly grain stocks report, which found 207 million bushels larger old crop supplies than expected. This additional supply carries over into the new crop balance sheet.
- Yield Estimate: The trade doesn’t typically expect large yield declines on the October report. Analysts are estimating a modest national decline from 186.7 bushels per acre to 185.0 bushels per acre.
- Stocks Projection: With only a slight drop in production, new crop stocks are projected to rise from 2.1 billion bushels to about 2.2 billion bushels.
Nelson noted that the market’s current mindset is reflected in the prices. “The market is giving some spreads, implying, well, we’ll pay you a little bit to keep this this, this crop in the bin,” he said, emphasizing that most farmers are currently “frustrated with these prices” and holding onto their product.
Soybeans: Minimal Change, Export Focus Ahead
Unlike corn, the soybean market did not experience a significant surprise from the quarterly grain stocks report. As with corn, analysts do not expect substantial yield changes in the October report.
- Yield Estimate: The trade estimate for yields has seen a minimal drop from 53.5 bushels per acre to 53.2 bushels per acre.
- Stocks Estimate: The new crop stock number is essentially unchanged, projected at 299 million bushels (down 1 million from the prior USDA number).
Nelson highlighted that the current trade consensus is not factoring in a large drop in export numbers, despite general concern. The true picture for soybean exports will likely depend on developments following a late-October trade meeting.
Wheat and Livestock Outlook
- Wheat: The trade’s view on wheat stocks is rising, increasing from 844 million bushels to 875 million bushels. This increase is due to the small grain summary finding 58 million bushels more production than previously estimated. This adds to the overall theme of rising grain stocks across the board.
- Livestock: While not the main focus of the initial reports, the pork supply story has changed since the last official USDA report. Recent hog and pig reports implied “some problems with farrowing in the prior two quarters,” which is expected to revise lower the supply of hogs from December through May. Nelson suggested that the next time the USDA adjusts these numbers, “2026 pork production to really be hit hard”. Beef supply is still expected to tighten, starting around mid-November and lasting through the spring.
Basis and Data Gaps
Nelson confirmed that producers are wisely “focused on our ag producers, is their basis levels”. The good news is that basis levels have begun to appreciate in some areas as harvest wraps up and bins are filled and locked up, allowing some grains to see “premiums paying to store for the back month futures”.
Despite the government shutdown, the market isn’t in a panic, but data holes exist. Nelson pointed out the missing weekly data:
- Crop Progress: News wires continue to poll analysts every Monday morning, suggesting that conditions are dropping slightly due to recent dryness, with the harvest pace remaining near the five-year average.
- Missing Information: The biggest gaps in data include the weekly export sales, typically released on Thursdays, and the fund movements, which are typically released on Friday afternoons.
Looking ahead to the November report, assuming one is released, the market will primarily focus on corn and soybean yields, as the November and January reports are typically when the USDA becomes more active with yield changes.
