PEORIA, Ill. – Visitors to the 2025 Greater Peoria Farm Show, Dec. 2-4 at the Peoria Civic Center, were treated to a slate of seminars from the University of Illinois farmdoc team covering topics ranging from small forest restoration management to plant abnormalities and their diagnoses. Kicking off the nine-seminar, three-day series was a grain market outlook that looked at challenges including advice on strategic planting decisions heading into 2026.

“USDA’s current corn yield projection at 186 bushels per acre is above trend, but not substantially above trend. A lot of people said this 186-yield line is totally out of line with what they’ve experienced. It may be a little high, but it certainly isn’t out of line with what we should expect,” said Joe Janzen, associate professor for the U of I College of Agricultural, Consumer and Environmental Sciences. He predicted that planted farm acreage could see a major shift back to soybeans in 2026.

“USDA has lowered their (2025) soybean yield estimate (to 53 bushels per acre, a record) to right around trend level yield. Thinking about the size of the 2026 crop, I do think we are going to see a swing back toward beans and away from corn. As a country, last year just over 98 million acres of corn were planted, and just over 80 million acres of soybeans. All signs would point to a reversal of that skew, swinging much more heavily back into beans in 2026.”

Current new crop prices of around $4.60 per bushel for corn and $11.20 for soybeans at the time of Janzen’s presentation served to further incentivize his projection for increased soybean acreage next year. “It is very rare historically that we see multiple years where the U.S. crop picks skew heavily more to corn or beans, and then does it again the next year. We saw it once during the ethanol boom in 2007-2008, and it’s been rare ever since,” he said. “There is potential for a monster bean crop that fills up the balance sheet.”

Biofuels, particularly renewable soybean oil for sustainable aviation fuel and animal feed, are expected to further drive demand for more soybeans in 2026, according to the U of I agricultural economist. “The bean market really is an export market and an animal feed market, with a little bit of oil for food, industrial and biofuels,” Janzen said, before noting that market drivers have changed in recent years, resulting in a restructuring of the soybean market hierarchy.

Janzen pointed out that soybean demand has shifted away from exports and toward domestic biofuels demand. In this process, the shares of soybean value due to the value of oil and meal are shifting and becoming more variable. Crush margins are also becoming more volatile. This makes soybean price changes harder to predict. 

Farmers and others trying to anticipate future prices should expect to make larger prediction errors. One component of this unpredictability has likely been the uncertain U.S. policy environment for renewable fuels. “Domestic demand has to be strong (in the face of) shrinking demand in the soybean export market for U.S. beans, specifically,” he said.

Increasing soybean demand will also hinge on broadening the animal feed market, which is in stagnation due to a historically low domestic herd count, according to Janzen. “The U.S. cattle herd is at a size that is substantially lower than in any other time in recent memory, with 86.7 million head (in January 2025) of all-cattle. Can we build animal feed demand both for corn and soybean meal through growth in the herd? The trend will have to reverse itself at some point,” he said, adding that he is “somewhat concerned” about future international soybean meal demand for U.S. exports.

Growth in renewable diesel will continue to bolster the soybean oil market for U.S. producers, Janzen said, with recent favorable news around renewable volume obligations (RVOs) for renewable diesel likely to spur demand. “This is one of the things that is underpinning the soybean oil market that is causing it to react so positively in the last few months. Not only did we get some good news on the trade front, but we also have this robust domestic demand for soybean oil,” he explained. 

Soybean oil extraction rates have vastly increased in recent years, further helping drive the increase in oil’s share of the soybean market. Between 2013 and 2020, the oil value share ranged between 25 to 35 percent. Since 2020, it has only rarely been below 35 percent. In both 2021 and 2025, it briefly reached 50 percent, according to Janzen, whose three part farmdoc series, “The Soybean Industry Response to the Renewable Diesel Boom,” examines the ramifications of further growth in biomass-based diesel production.

Of course, a return to “normal” trade relations with China in 2026 would re-energize soybean demand in all forms. “The administration’s framework agreement they have with China apparently includes very specific numerical targets for soybean exports. Those targets are not based on value, they are based on quantity. The question is how much you believe these commitments, which the administration has put out but have never been confirmed by China, are binding,” said Janzen, adding that the rumored commitment by China “wouldn’t really move the needle” on returning U.S. soybeans to the export level they had been at historically.

“The one wild card on the trade front is substantial uncertainty as to what tariff policy the U.S. will put out moving forward,” he said.