USDA Reports Preview          05/08 15:20

   May WASDE Offers First Guess of 2026 Crops

   USDA will release its May Crop Production and World Agricultural Supply and 
Demand Estimates (WASDE) reports on Tuesday, May 12. It is a unique report 
because it features the first look at 2026-27 balance sheets for corn, soybeans 
and wheat.

Rhett Montgomery
DTN Lead Analyst

   At 11 a.m. CDT on Tuesday, May 12, USDA will release the May edition of Crop 
Production and the World Agricultural Supply and Demand Estimates (WASDE) 
reports. It is a unique report because it features the first look at 2026-27 
balance sheets for corn, soybeans and wheat.

   CORN

   The corn market enjoyed a strong finish to the month of April, reaching 2026 
calendar year highs for new-crop December futures while old-crop July prices 
tied their highest mark thus far on May 5. Through the past week, however, 
prices have been pressured by technical-based selling along with risk-off trade 
stemming from reports of progress potentially being made in restarting 
negotiations between the U.S. and Iran, though that remains to be seen. For 
Tuesday, traders will shift focus back to fundamentals, where the corn market 
is very likely to reflect healthy worldwide supplies.

   Beginning on the old-crop side of the equation, USDA will take another look 
at demand categories. As a bullish note, the record pace for corn exports is 
undeniable, with commitments as of April 30 surpassing the 3-billion-bushel 
(bb) mark and 29% ahead of the same point in 2025. USDA is expecting a 15% 
year-over-year increase in corn exports to 3.3 bb. Meanwhile, through March, 
the amount of corn used for ethanol is running less than 1% ahead of the same 
point in 2024-25, with USDA expecting a 3% increase. As mentioned in previous 
writings, I also remain skeptical of the record-large feed and residual USDA is 
currently penciling for 2025-26. All totaled, I have an upward bias toward 
2025-26 U.S. corn ending stocks, and the 14 analysts surveyed by Dow Jones 
appear to agree, with an average guess of 2.140 bb compared to 2.127 bb in the 
April WASDE.

   Jumping to new-crop 2026, it is very likely that USDA will use the 95.3 
million acres (ma) of corn found in the March Prospective Plantings survey, 
combined with a trendline yield of 183 bushels per acre (bpa). Assuming the 
same harvest ratio in the February Ag Outlook, would give a 2026 corn 
production estimate of 15.974 bb. This would be down roughly 6% from last 
year's record crop. On the demand side, it is difficult to gauge this far in 
advance, but history would suggest lower supply means slightly lower demand 
(typically as a result of a higher average price). The Dow Jones survey expects 
1.960 bb of U.S. ending stocks by August 2027, which would imply roughly 16.2 
bb of demand compared to 16.47 bb this year, which seems reasonable.

   Within the world market, the focus will once again be on South America. The 
wet season in Brazil ended a couple of weeks early this year, leaving a good 
portion of the safrinha corn crop hot and dry through pollination. While the 
jury is still out on that, it's important to remember that USDA's 132 million 
metric ton (mmt) estimate from April is quite a bit lower than many others, 
including CONAB at 139.6 mmt. For this reason, traders see the USDA forecast 
rising to 133.7 mmt in Tuesday's report. Meanwhile, in Argentina, USDA is now 
well below local estimates, which range from 61 mmt up to 67 mmt. The Dow Jones 
survey has the crop at 56.2 mmt and up from 52 mmt in the April report. As a 
result, world corn ending stocks are expected to rise moderately to 296.5 mmt. 
For the new 2026-27 season, ending stocks are expected to fall to 286.7 mmt, 
largely driven by the changes in the U.S., and it is of course still very early 
to draw overly confident conclusions on world supplies for the next year.

   SOYBEANS

   Since the last WASDE in early April, soybean futures have traded in a mostly 
sideways pattern, with July futures roughly 7 cents higher than the April 9 
close at the time of writing this. Meanwhile, new-crop futures have enjoyed a 
bullish month, hitting new calendar year highs in early May for the November 
contract. While President Trump's visit to China on May 14-15 is arguably the 
most pivotal upcoming event for the soybean market, traders will tune in on 
Tuesday for USDA's take on supply and demand.

   For the 2025-26 season, demand continues to be a mixed bag. On one hand, 
crush premiums are near record levels thanks to three-and-a-half-year highs in 
soybean oil futures. Through March, the volume of soybeans crushed through the 
marketing year was 8.6% ahead of the same point in 2024-25, with USDA currently 
forecasting a 6.7% year-over-year increase to 2.610 bb. On the export side of 
things, commitments as of April 30 are 1.430 bb, down 18% and even with USDA's 
full-year expected decline. With four months remaining in the marketing year, 
achieving 110 million bushels (mb) of sales and 220 mb of shipments to hit 
USDA's goal by no means appears unattainable, but will need to be monitored 
closely. For Tuesday, I expect minimal changes to the old-crop outlook, and 
stocks could very well remain near 350 mb. The analysts surveyed by Dow Jones 
are expecting 347 mb on average. For the new-crop outlook, using the March 
Prospective Plantings area estimate of 84.7 ma and a trendline yield of 53 bpa 
would result in a 4.436 bb crop, up 4% from 2025, if true. On the demand side, 
I expect USDA to forecast a recovery from the 13-year low in export demand set 
in 2025-26, while crush will very likely expand to another record. The Dow 
Jones survey estimate for 2026-27 ending stocks of 353 mb would imply demand 
near 4.453 bb, also 4% improved from 2025-26.

   For the world update, the old-crop season should feature only fine-tunings 
to USDA's estimates for world crops. That being said, traders are expecting a 
slightly higher Brazilian crop to 180.4 mmt, and an upward revision to 
Argentina's production as well to 48.5 mmt. As a result, stockpiles are 
expected to grow to 125.6 mmt and reclaim their place as the largest world 
soybean reserves on record. However, traders are not expecting that record to 
be held for long, anticipating 126.3 mmt of reserves for the upcoming 2026-27 
season. For what it's worth, in their March Oilseed annual reports, the USDA 
attache in Brazil forecasted another year of growth in planted soybean area and 
a crop of 184 mmt. For Argentina, USDA is expecting acreage to increase by 5% 
in 2026-27, but were conservative on yield, resulting in only a slight increase 
in production to 49 mmt.

   WHEAT

   On April 9, the day of the last WASDE report, July Kansas City wheat futures 
closed at $6.05 3/4. Since then, declining winter wheat conditions in the U.S. 
and ongoing fertilizer constraints out of the Persian Gulf sent futures 
skyrocketing to a high of $7.18 1/2 on April 29. Since then, futures have 
turned lower on a combination of technically inspired profit-taking and reports 
of renewed peace proposals in the Middle East. On Tuesday, traders will get a 
much-anticipated look into where USDA sees U.S. wheat production landing in 
2026 amid widespread drought.

   To start with the old-crop 2025-26 season, which is set to end on May 31, I 
don't expect drastic changes from the April report. As a positive note, wheat 
export commitments as of April 30 are 910 mb, ahead of USDA's goal of 900 mb. 
However, shipments will need a strong finish to reach the goal, otherwise some 
sales will likely carry over into the new season. Analysts surveyed by Dow 
Jones combined for an average guess for 933 mb of wheat stocks as of June 1, 
which I would agree with as a fair assumption. For new-crop production, the 
average trade guess is calling for 1.731 bb between winter and spring wheat 
varieties, with none of the varieties expected to outperform 2025's crop amid 
historically low area. Personally, I'm using a 1.735 bb crop, which is right in 
line. The Dow Jones survey results for ending stocks of 841 mb would imply a 
slight decline in total wheat usage, although the silver lining there is that 
would likely need to be the result of a higher price as compared to the 
five-year lows seen in 2025.

   For world wheat, no major changes are expected for the old 2025-26 season, 
with world reserves expected to be similar to April's update at 283 mmt. Moving 
ahead to 2026-27, and analysts are expecting a minor decline in stocks to 281.2 
mmt. In their April Grain and Feed annual reports, USDA already forecasted 
anticipated production declines from a record-setting 2025. With Argentina, 
Australia and Canada expected to fall annually by 25%, 19% and 10%, 
respectively. As is usually the case with the world wheat balance sheet, it 
will be important to monitor overall production and trade trends rather than 
stocks themselves, which can be misleading given the large reserves held by 
countries such as India and China, which are typically closed off to world 
trade.

   **

   Join us for DTN's post-report webinar at 12:30 p.m. CDT on Tuesday, May 12, 
as we discuss USDA's new estimates in light of recent market events. Questions 
are welcome, and registrants will receive a replay link for viewing at their 
convenience. Register here for Tuesday's USDA WASDE webinar: 
https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.dtn.com%2F
wasde-webinars%2F&data=05%7C02%7Cellamae.reiff%40dtn.com%7C61d9d83b9f9c47b6ac9a0
8dead15b34b%7Cd945da26f07f451496e79b8f78a743d0%7C0%7C0%7C639138505875633940%7CUn
known%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIs
IkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=u1UIH62PP5C2HONl%2BZ4pb%2BLd
ay89SGSazk%2BmZ6DbNBY%3D&reserved=0.

U.S. PRODUCTION (Million Bushels) 2026-27
                     May   Avg           High          Low
Corn                       15,948        16,011        15,819
Soybeans                   4,450         4,521         4,405
All Wheat                  1,731         1,833         1,653
Winter                     1,201         1,375         1,130
U.S. ENDING STOCKS (Million Bushels) 2025-26
                     May   Avg           High          Low           Apr
Corn                       2,140         2,267         2,077         2,127
Soybeans                   347           370           320           350
Wheat                      933           962           912           938
U.S. ENDING STOCKS (Million Bushels) 2026-27
                     May   Avg           High          Low
Corn                       1,960         2,110         1,776
Soybeans                   353           475           300
Wheat                      841           955           760
WORLD ENDING STOCKS (million metric tons) 2025-26
                     May   Avg           High          Low           Apr
Corn                       296.5         300.4         293.0         294.8
Soybeans                   125.6         127.0         123.7         124.8
Wheat                      283.0         284.0         282.0         283.1
WORLD ENDING STOCKS (million metric tons) 2026-27
                     May   Avg           High          Low
Corn                       286.7         301.0         268.0
Soybeans                   126.3         132.6         122.1
Wheat                      281.2         291.0         275.0
WORLD PRODUCTION (million metric tons) 2025-26
                     May   Avg           High          Low           Apr
CORN
Argentina                  56.2          60.0          52.0          52.0
Brazil                     133.7         137.0         130.0         132.0
SOYBEANS
Argentina                  48.5          49.0          48.0          48.0
Brazil                     180.4         181.6         180.0         180.0

   Rhett Montgomery can be reached at rhett.montgomery@dtn.com

   Follow him on social platform X @R_D_Montgomery




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