Bearish Surprises in January WASDE Report: USDA Increases Corn Acres, Stocks While Trade Eyes Future Demand: The USDA’s January World Agricultural Supply and Demand Estimates (WASDE) report delivered several bearish surprises to the grain markets, finalizing a supply-heavy picture for the 2025 marketing year. In a discussion with Farm Director KC Sheperd, Rich Nelson of Allendale Inc. broke down the numbers, highlighting unexpected increases in corn production and lingering concerns over export demand.
Corn and Soybeans See Supply Boosts The most significant shifts occurred in corn, where the USDA raised harvested acres by 1.2 million acres. This adjustment pushes harvested acres for 2025 to 8 million above 2024 levels, significantly expanding the acreage baseline.
“Yields were raised on this report for corn by a half bushel. The trade expected a two-bushel decline,” Nelson said. “So higher production helped ending stocks go from 2.0 to 2.2 billion bushels. So a little bearish on the corn side.”
Soybean data also defied trade expectations. While the market anticipated a decline in yields, the USDA kept them unchanged at 53 bushels per acre. Consequently, ending stocks were raised from 290 million to 350 million bushels—higher than analysts predicted. Nelson noted that the USDA also revised Brazil’s production upward by 3 million tons, adding to the global supply pressure.
Wheat and Cotton Markets The wheat balance sheet remained relatively quiet, with ending stocks raised slightly to 926 million bushels. However, Nelson pointed to winter wheat plantings as a key metric. Despite expectations of a 700,000-acre decline due to financial conditions, the USDA only reported a drop of 200,000 acres, suggesting that available acreage for the upcoming season remains largely unchanged.
For cotton producers, the news was mixed but generally stable. The USDA lowered its production estimate from 14.3 million to 13.9 million bales and tightened stocks slightly to 4.2 million bales. “USDA made no change for the export story for cotton on this report,” Nelson observed, indicating that current export views are likely set for the coming months.
Livestock Outlook On the livestock front, beef production is set for a light decline in 2026, though increased import views (up 75 million pounds) leaned slightly bearish. Pork production, reflecting data from December’s Hogs and Pigs report, is projected to increase by 2% in 2026 as producers expect to bring more hogs to market.
Looking Ahead With the “old crop” supply story now effectively set in stone, market attention will turn to demand and the upcoming 2026-2027 crop year. Nelson advised producers to watch for the USDA’s annual outlook conference in February and the prospective plantings survey in March for the next major market movers.
“We have larger supply than expected, and we’re likely stuck with these supply numbers here now set in stone for this current marketing year,” Nelson concluded.
You can also view the full reports here:
— Crop Production Annual, Grain Stocks and Winter Wheat and Canola Seedings:
— World Agricultural Supply and Demand Estimates (WASDE):
