ARLINGTON, VA. – Aaron Ates, Ph.D, senior feed grains analyst for the USDA’s Economic Research Service (ERS) offered a rundown of the agency’s 2025-2026 Grain and Oilseed Outlook as part of the 101st USDA Ag Outlook Forum. Ates told those assembled in Arlington, Va., and a worldwide virtual audience that data points indicate U.S. producers will plant more corn this year, and corn will be more profitable than soybeans.

“Our forecast for 2025-2026 calls for corn acres to be up by about 3.5 million acres to 94 million acres. Soybean acres are down about 3 million acres from 87 to 84 (million acres), and total wheat acres are up about 1 million acres from 46 to 47 (million acres),” he said. “Given the decrease in soybean area some expansion of wheat plantings are expected as we head into 25-26, with the three-crop total sitting at about 225 million acres, just above last year’s total and the 10-year average.” 

The ERS forecast was developed assuming “normal” weather patterns and growing conditions, a normal planting-to-harvest ratio and an assumption that current farm policies would remain in place. Global GDP growth is expected to be “flat” over the coming year for the purpose of the projection, and the value of the U.S. dollar, as determined by the St. Louis Federal Bank, is expected to remain strong compared to that of most U.S. trade partners.

“Although (Brazil and Argentina) have made some significant strides in recent years in terms of (corn) output, it still pales in comparison to the output here in the U.S. The opposite is true for soybeans; the U.S. once held the title of the largest producer among world exporters but relinquished this title to Brazil. Going forward I think it will be interesting to see what the output is in Brazil and Argentina for soybeans as they do have the potential to impact planting decisions here in the U.S. via price reactions,” Ates said.

With total U.S. and global corn stocks down year-over-year and China’s corn stocks rising, the U.S. is in a “unique position whether it’s related to trade or domestic use,” according to Ates. “The opposite can be said for (global) soybeans, which are up year-over-year. The U.S. doesn’t constitute as large a share of global soybean stocks as we do corn, though U.S. soybean stocks do seem to be rising year-over-year.”

Another data point examined by ERS in determining projections is the soy-corn price ratio, which indicates more favorable economics for planting corn in 2025. “Typically, if the ratio between these prices is less than 2.3, we take that as a signal that the market is demanding or calling for more corn and less soybeans. There has been some variation in the past few months, but the line has stayed below 2.3 (rather consistently),” said Ates, while presenting a graph illustrating the current price ratio as of Feb. 27 at approximately 2.10.

“We also utilize a weather-adjusted trend model giving us a boost in yield to 181 bushels per acre. This is partially offset by a reduction in beginning stocks, but ultimately leads to an increase in supply of about half a billion bushels for ‘25-’26,” he said. “This increase in supply is expected to place downward pressure on prices and incentivize feed and residual use of corn in ‘25-’26.”

ERS projects that food, seed and industrial use of corn will fall by about 5 million bushels as high fructose corn syrup demand decreases. A decline in exports of corn is expected to reach 50 million bushels on the expectation of stiffer competition from Brazil and Argentina. The ethanol forecast, which has been flat at around 5.5 million bushels, is expected to remain relatively stable with the expectation that demand for gasoline will remain stable, according to the ERS analyst.

With the expected increase in corn planted area, “if these forecasts are realized we will have record supplies of corn in 2025-26,” said Ates, adding, “Our balance sheets do have supply outpacing demand and as a result our ending stocks are expected to grow.”

Soybean yields are expected to increase, assuming normal weather and growth, to 52.5 bushels per acre in 2025, reflecting a yield bump of nearly 2 bushels per acre over the past two years, according to ERS projections.

“When combined with the higher carry-in from ‘24-’25, it ultimately lifts our supply estimate by 40 million bushels,” Ates said. “Our competition in the soybean market is expected to be tight with South America. In Brazil, their supply gains in the coming months are expected to outpace demand gains. As a result, as we enter harvest in ‘25 here in the U.S. their stock levels are anticipated to be higher than they normally are. These market dynamics, in which global supply is rising, places downward pressure on prices and is also expected to increase demand, opening the door and increasing opportunities for the U.S. to increase our export volumes.”

Accordingly, export demand for U.S. soybeans is expected to rise by 40 million bushels year-over-year for 2025-2026. Crush volume is expected to increase by 65 million bushels, largely driven by anticipated demand for oil for use in domestic biofuels and the export market.

An increase in production of soybean meal by around 1.4 million tons is also anticipated by ERS, with increased domestic demand the primary driver and the remainder allocated for export.

The ERS forecast presented at the Ag Outlook Forum will serve as USDA’s official 2025-2026 balance sheet until the late-March Prospective Plantings report is issued, at which time projections may be updated. Further forecast guidance will come from the May USDA World Agricultural Supply and Demand Estimates report, according to Ates, who works out of the USDA’s Kansas City ERS office.

To access the full USDA-ERS 2025 Grains and Oilseeds Outlook, visit www.usda.gov/sites/default/files/documents/2025AOF-grains-oilseeds-outlook.pdf.