The USDA surprised several traders this month by cutting the U.S. corn yield 3.8 bushels per acre in the final adjustment of the marketing year, taking it down to 179.3 bushels per acre, well below the expected 182.7 bpa. This cut the U.S. corn crop to 14.867 bullion bu, a 276 million bu reduction from December. Corn demand was also trimmed by 75 mbu, with 50 mbu cut from residual demand and 25 mbu fewer exports. These cuts were more a result of the lower yield than actual demand, especially in exports. While this reduced total corn use to 15.115 bbu, ending stocks were still lowered a large 198 mbu to total 1.54 bbu. This is a stocks-to-use ratio of 10.2 percent and puts it at a level where ration normally begins. The USDA bumped its average cash value of corn up to $4.25 this month. 

Fewer changes were made to the soybean balance sheets, but they still received a bullish reaction. The USDA trimmed the average U.S. soybean yield to 50.7 bpa this month, a decline of 1 bu from December. This combined with a 200,000-acre reduction to harvested acres to give us a crop of 4.366 bbu, a 95 mbu reduction from a month ago. The USDA raised its soybean import forecast by 5 mbu, and lowered residual demand by 1 mbu, giving us a projected carryout of 380 mbu, 80 mbu less than the average trade guess. This is an 8.7 percent stocks-to -se ratio, a level where we normally start to see price rationing transpire. The USDA left its cash price projection unchanged at $10.20 per bushel, however.

One number from the soybean balance sheets trade is questioning is soybean crush, with the USDA leaving it unchanged again this month at 2.41 bbu, despite an ever-growing demand for soy oil. The USDA cut domestic soy oil demand for biofuels by 400 million pounds this month, but increased exports 500 million pounds for a decrease to soy oil ending stocks of 100 million pounds. Domestic soy oil production increased 75 million pounds this month and the USDA raised its import forecast by 50 million pounds for a 25-million-pound increase to projected ending stocks. This put the U.S. soy oil carryout at 1.53 billion pounds.

Only minimal changes took place to U.S. wheat balance sheets this month as well. Production was left unchanged at 1.97 bbu. The USDA bumped its import forecast higher by 5 mbu, which was partially offset by a 2 mbu increase in seed demand. This caused a net 3 mbu increase to ending stocks, taking it to 798 mbu. This is a 40 percent stocks to use and equates to a cash value of $5.55 per bushel.

Wheat traders were more interested in the U.S. winter wheat crop acreage estimate for 2025. This came in a bit higher than trade was expecting at 34.1 million acres. Trade was expecting acreage closer to 33.3 million, which would have been little changed from 2024.

Very few changes took place to the global balance sheets this month, and most reflected changes to the U.S. crops. The world corn carryout is now forecast at 293.34 million metric tons this month, down 3.1 mmt from December. While a minimal decline, this is the tightest U.S. corn carryout forecast in 10 years. Global soybean carryout is estimated at 128.37 mmt, a 2.5 mmt cut from last month. The global wheat ending stocks are estimated at 258.82 mmt, up 1 mmt from December. No changes were made to the South American crops this month. This held Brazil’s crop at 169 mmt on soybeans and 127 mmt for corn. The Argentine crops remain at 52 mmt on soybeans and 51 mmt for corn. 

The USDA raised its red meat production forecasts this month. Beef production is now forecast at 25.79 billion pounds for 2025, an increase of 130 million from the December forecast. This is still a large 1.2-billion-pound decline from 2024 as the U.S. is seeing its cattle inventory shrink to multi-decade lows. Pork production for 2025 is now estimated at 28.51 billion pounds, a 140-million-pound increase from a month ago. In a complete opposite of beef, this is an increase of 720 million pounds from 2024. The USDA is forecasting average 2025 market values of $195.50 per hundredweight on cattle and $63.25 per cwt on hogs.

The USDA left its beef and pork export forecasts for 2025 unchanged this month. This held beef exports at 2.6 billion pounds and pork at 7.33 billion pounds. This would be a 400-million-pound decline on beef from 2024, but a 217 million pound increase on pork. The USDA bumped its beef import forecast up to 4.77 billion pounds this month, a 60-million-pound increase from December. This is also a 152-million-pound growth from 2024.

The quarterly stocks data was also released along with the January WASDE update, with some surprising data. As of December 1st, the United States had 1 percent less corn but 3 percent more soybeans and 10 percent more wheat in reserves than a year ago. The U.S. corn supply totaled 12.1 bbu. Of this, 7.66 bbu was stored on-farm, 2 percent less than a year ago. Soybean stocks came in at 3.1 bbu. On-farm soybeans were up 6 percent year to year at 1.54 bbu. The U.S. wheat inventory was 1.57 bbu, with on-farm stocks up 16 percent from a year ago at 467 mbu.

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