Nate Bruce, Farm Business Management Specialist, nsbruce@udel.edu
Tariffs and trade news continued to impact commodity markets in the month of May. May kicked off the 2025/2026 marketing year. Early crop estimates and planting progress reports are impacting commodity markets as planting is underway. Corn futures have seen little movement thus far in May with movement in the $0.05 – $0.10 range throughout the month. The May USDA World Agriculture Supply Demand and Estimate (WASDE) report did little to move markets, affirming expectations for increased corn acreage. In late April, the Environmental Protection Agency announced they would allow for higher ethanol E15 gasoline to be purchased by consumers throughout the summer which increased ethanol production towards the end of the month. Other than slight demand changes to ethanol, there has not been any significant changes to corn demand over the past month. Corn markets have now entered the wait and see weather market point of the cropping season. Soybean prices saw their most significant rally in 2025 on 5/12, triggered by tariff trade news and a favorable USDA WASDE report. Futures jumped by $0.20 – $0.25 over the course of the day. The US and China reached a trade deal, reducing tariff rates for 90 days. China announced they will reduce tariffs on US imports to 10%, down from the 125% while the combined US tariff rate on Chinese imports will be cut to 30% from 145%. The USDA WASDE report reaffirmed the lower expected acres for the marketing year by projecting lower production estimates. Just like corn prices, soybean markets have entered the weather market stage of the production year. Wheat prices have fallen significantly during the month of May thus far, spurred on by an unfavorable USDA WASDE report. Wheat futures have retreated over the course of the month trading in a $0.05 – $0.10 range.
The May USDA WASDE report was published on May 12th and was the first WASDE report with estimates for the new 2025/2026 marketing year. The 2025/2026 US corn outlook is for record supplies and total use with higher ending stocks. Estimated corn acres planted is at 95.3 million acres, an increase of nearly 5 million acres from the 2024/2025 marketing year estimate. This is the highest acreage in over a decade if it comes to fruition. Area harvested is estimated at 87.4 million acres, up 4.5 million acres from the 2024/2025 marketing year. Yield harvested per acre was estimated at 181 bushels per acre. Total production was estimated at 15,820 million bushels, a 953 million increase from the 2024/2025 marketing year estimate. Total corn supplies are estimated at 17,260 million bushels with lower beginning stocks offsetting production. US corn demand is projected to increase for the 2025/2026 marketing year due to higher domestic use and exports. Ethanol demand is projected to change very little and feed and residual demand is projected to increase to 5,900 million bushels. Ending stocks were projected to increase to 1,800 million bushels, up 385 million bushels from the final 2024/2025 estimate. The projected farm season average corn price for the marketing year was projected to be $4.20 per bushel. World corn demand was projected to increase with consumption outpacing production. Global corn ending stocks were projected to decrease for the 2025/2026 marketing year. The 2025/2026 marketing year US soybean outlook is for lower production, reduced exports, lower ending stocks, and increased crush demand. The projected soybean acreage planted was estimated at 83.5 million acres, down from the 87.1 million acres in 2024/2025. Total harvested acres are estimated at 82.7 million acres, down 3.4 million acres from the previous marketing year estimate. Yield harvested per acre increased slightly to 52.5 bushels per acre. Total soybean supplies were lower than the 2024/2025 year at 4,340 million bushels, despite an increase in beginning stocks. Crushing demand was estimated at 2,490 million bushels, an increase spurred on by tighter supplies. Exports were estimated to be 1,815 million bushels, down by 35 million bushels. Seed demand increased slightly while residual demand fell. Ending stocks fell from 350 million bushels to 295 million bushels for the 2025/2026 crop year. The projected farm season average soybean price for the marketing year was projected to be $10.25 per bushel. Global soybean production was estimated to increase for the 2025/2026 marketing year with increases occurring in Brazil, Paraguay, Russia and China. Brazil’s total soybean production is estimated to set a new record at 175 million tons. Both global soybean demand and global soybean exports are projected to increase. The May USDA WASDE estimated increased wheat supplies, higher domestic use, higher stocks, and reduced exports for the US. Projected wheat area planted was lower by about 1 million bushels than the previous marketing year at 45.4 million bushels. Estimated area harvested area was down as well at 37.2 million bushels. Yield harvested per acre was estimated at 51.6 bushels per acre. Beginning stocks were up 145 million bushels over the previous marketing year at 841 million bushels. This offset the estimated decrease in production, raising total supplies in the 2025/2026 marketing year to 2,882 million bushels. Food demand increased on lower expected prices while exports were projected to fall from 820 million bushels to 800 million bushels. Seed and residual demand were unchanged for the 2025/2026 marketing year. Wheat ending stocks were forecasted at 923 million bushels which is the highest level in six years. The projected farm season average price was estimated to be $5.30 per bushel, down by $0.20 from the previous marketing year. The global wheat outlook estimates increased supplies, increased consumption, trade, and higher stocks for the marketing year with total production set to reach a record 808.5 million tons. It should be noted the May WASDE report is the first estimates for the crop year. Estimates will change as the year unfolds, particularly production estimates. The next USDA WASDE report will be released on June 12th.
Planting progress across the country has been full steam ahead with favorable weather conditions allowing for two-thirds of expected corn acreage to be planted. The weather market is now fully in play as we approach the growing season. The 9% increase in soybean harvest projected by USDA ramped up soybean imports from Brazil to China between January and April in 2025, as compared to total imports over the same time period last year. As the most recent trade war has ramped up, China continues to seek alternative soybean sources for soybeans in the export market. In addition to expanding trade with Brazil for imported soybeans, China negotiated a deal to import Argentinian soybeans as well. The agreement was non-binding but could be reflective that China is seeking multiple avenues for soybeans and soy products amid the ongoing trade war. During the ongoing Ukraine-Russia peace negotiations, discussion on the Black Sea Initiative was resurrected. The deal was brokered in 2022 but terminated a year later in summer of 2023. It will be interesting to see if there is continued discussion on the deal in future peace negotiations and how potential reinstatement could impact global export markets.
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