The USDA’s annual Ag Outlook Forum released its initial 2026/27 balance sheets with little variance from expectations.

The USDA is predicting corn plantings of 94 million acres this spring, well below the 98.8 million acres from a year ago. The USDA is also predicting a corn yield of 183 bushels per acre and a crop of 15.76 billion bu. This compares to last year’s corn crop of 17 bbu. No major changes were made to corn demand outlooks, with ethanol use at 5.6 bbu and seed/residual usage at 6.97 bbu. Corn ending stocks are forecast at 1.837 bbu, down 290 million bu from this year’s estimate. An average cash corn values of $4.20 for the 2026/27 marketing year is being forecast, 10 cents more than the current projection.

Soybean balance sheets came in right at trade expectations. Soybean acreage is estimated at 85 million this year compared to 81.2 million a year ago. The U.S. 2026/27 soybean yield is estimated at 53 bpa and crop size is projected at 4.45 bbu, up from the 2025/26 crop of 4.26 bbu. Soybean crush is projected at 2.655 bbu, 85 mbu more than this year. Ending stocks are forecast at 355 mbu, 5 mbu more than this year. The average cash soybean value is projected at $10.30, 10 cents more than the current estimate.

Wheat balance sheets were also in line with expectations. Total U.S. wheat plantings this year are forecast at 45 million acres, 300,000 fewer than last season. The average yield is pegged at 50.8 bpa for the year to produce a 1.86 bbu crop. This would be a loss of 125 mbu from last year’s crop. Ending stocks are expected to total 933 mbu, a slight 3 mbu increase from this year. Wheat futures are forecast to average $5.00 in the 2026/27 marketing year, 10 cents better than this year.

The Forum also released its cattle and hogs estimates for 2026. On Jan. 1, the USDA states the U.S. cattle herd total 86.2 million head compared to 86.5 million in 2025. This was the 7th consecutive year of reductions to the cattle herd. Beef cows declined 1 percent in 2025 while the dairy herd expanded by 2 percent. The USDA also noted a 1 percent increase in beef heifer retention for breeding. The USDA also reported a 2 percent smaller calf herd in 2025, cutting in to replacement availability. The average steer value in 2026 is estimated at $240, up 7 percent from 2025. Feeder cattle are forecast to average $364 in 2026, a 13 percent increase from 2025.

The USDA data showed pork production declined 1 percent in 2025 to total 27.6 million pounds. Hog slaughter numbers were down in the year, but hog weights were higher. U.S. pork exports were down in 2025 by 2 percent but are expected to fully regain this in 2026. Hog values are forecast to average $69 per hundredweight in 2026.

The National Oilseed Processor Association released its January crush data with mixed figures. Soybean crush in the month totaled 221.56 million bu, a record high for the month. This was a 1.5 percent decline from December as harsh winter weather slowed operations. The January total was still above estimates and a 10.6 percent increase from a year ago.

End of January soy oil stocks were also above estimates though, coming in at 1.9 billion pounds, 200 million more than forecast. The January oil stocks were also an increase of 15.7 percent from December and 49 percent more than January 2025. Soy oil exports have been pressured by cheap alternative vegetable oils, but demand has started to resurface.

Hog producing giant Smithfield Foods announced it will be constructing a new hog processing plant in Sioux Falls, S.D. The plant will cost an estimated $1.3 billion and will replace Smithfield’s current plant in Sioux Falls that is over 100 years old. The new facility will be capable of processing 20,000 hogs per day and employee 3,000 workers. There is some opposition to this plant though as Smithfield is a subsidiary of a Chinese food group, not one that is U.S. owned.

The February cattle on feed report was mostly as expected. On Feb. 1, the USDA reported 11.5 million head of cattle were on feed in lots with capacity of over 1,000 head. This was a 2 percent reduction from the February 2025 total. Feeder placements in January totaled 1.74 million head, 5 percent fewer than a year earlier. January markets were down 13 percent from last year at just 1.63 million head. These numbers indicate there may be little relief for high cattle or elevated beef values in the immediate future. Both feeders and packers are currently facing negative margins though, which is typically bearish for the market.

It is interesting to note that while cattle on feed numbers declined 2 percent from a year ago, the number of U.S. dairy cows increased 2.2 percent from February 2025.

Neither cattle feeders nor packers are reporting profitability in today’s market, and this is very concerning. High replacement costs and rising feed grain values are straining cattle feeders, with more starting to scale back their placements. Packers are being forced to pay premiums to encourage movement, and this has their margins in the red as well. The entire cattle complex is seeing differing demand outlooks, and this has applied additional price pressure, especially with elevated futures.

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