CORN HIGHLIGHTS:

• A bearish USDA report triggered strong selling in the corn market on Monday as prices finished sharply lower in the session. The combination of larger-than-expected yield and increased corn acres triggered long liquidation.  March corn futures dropped 24 ¼ cents to 421 ½, while the May contract lost 23 ¼ cents to 430 ½.
• USDA raised the corn yield by 0.5 bushels/acre to 186.5 bu/acre and increased harvested corn acres by 1.3 million acres, forecasting a US corn crop over 17 billion bushels, which is a record. The yield increase was above market expectations, with the market anticipating a yield reduction.
• Despite some demand adjustments, USDA raised US corn carryout for the 2025-26 marketing year to 2.227 billion bushels, nearly 250 mb above market expectations. The large projected corn supply weighed heavily on the corn prices during the session.
• USDA announced a flash export sale of US corn on Monday morning. South Korea purchased 204,000 MT (8.0 mb) and Unknown Destination purchased 310,000 MT (12.2 mb) for the current marketing year.
• Weekly corn export inspections remain strong. For the week ending January 8, corn export inspections totaled 1.490 MMT.  This was near the top end of expectations. Total inspections are running 61% ahead of last year’s pace.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day sharply lower following a bearish WASDE report. Futures were as much as 8 cents higher before the report and did rebound off the post-report low. March lost 13-1/2 cents to $10.49, while November lost just 4-3/4 cents to $10.67. March soybean meal lost $5.40 to $298.30 while March soybean oil gained 0.58 cents to 50.27 cents.
• Today’s USDA report was bearish on nearly every front. While many in the market had expected soybean yield to be reduced, it was instead left unchanged at 53.0 bushels per acre, well above the 2024/25 yield of 50.7 bpa. Ending stocks were increased to 350 million bushels, up 60 million from the previous estimate. The report also raised Brazilian soybean production to 178 million metric tons from 175 million last month, a level that would represent a record crop.
• Today’s export inspections report for soybeans was decent with inspections totaling 56.2 million bushels for the week ending January 8 which put total inspections for 25/26 at 659 mb which is down 43% from the previous year.
• South American weather may provide some support in the near term with Argentina slightly dry which would benefit soybean meal prices. Brazilian weather has been excellent, but forecasts through the end of the month show a drier pattern emerging.

WHEAT HIGHLIGHTS:

• After opening the session on a positive note, wheat futures were pressured lower by today’s WASDE data, which was broadly negative. Additional weakness spilled over from a sharp decline in corn futures. March Chicago wheat fell 6 cents to 511¼, Kansas City dropped 3½ cents to 526¾, and MIAX slipped 1¾ cents to 565¾. Despite the bearish tone, a weaker U.S. dollar and ongoing dryness across the Southern Plains could help provide underlying support.
• On today’s report, US 25/26 wheat carryout was pegged at 926 mb, up 25 mb from last month. This was above expectations and was attributed to lower feed usage. Global 25/26 ending stocks came in at 278.3 mmt, up 3.4 mmt vs December. Production was raised in Argentina by 3.5 mmt to 27.5 mmt, and in Russia by 2 mmt to 89.5 mmt.
• Quarterly wheat stocks came in at 1.675 bb, which was above expectations of 1.636 bb, and compare to 1.573 bb a year ago. Additionally, the winter wheat planting figure was estimated at 33.0 million acres. This was down 0.2 ma from 2025, but was above the average pre-report estimate, which called for 32.3 ma.
• In addition to today’s supply and demand data, traders also received weekly export inspections. For the wheat market, inspections amounted to 11.7 mb, bringing the total 25/26 figure to 573 mb, up 19% from last year. Wheat inspections are currently running above the USDA’s estimated pace. They are projecting 25/26 exports at 900 mb (unchanged from last month), up 9% from the year prior.

DAIRY HIGHLIGHTS:

• Cheese was pressured to start the week, losing 3.625 cents to close at its lowest point since May 2020 at $1.32125/lb.
• Class III futures were weaker as a result of a poor cheese trade. March futures lost 7 cents to close at $15.28.
• Spot butter was unchanged from Friday at $1.30/lb, while powder fell just half a cent to go home at $1.26/lb.
• Class IV futures steady to slightly higher due to less volatile action in butter. March futures tacked on 9 cents to close at $14.69.
• There was a corn feed recommendation today to book Q2 ’26.

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Author

John Heinberg