The May WASDE report corn balance sheet updates were a little surprising. The USDA trimmed its 2024/25 corn carryout estimate to 1.41 billion bu, down 50 million bu from April. This was the result of a 50 mbu increase to exports. The most interest in corn was the initial 2025/26 balance sheet release. The USDA put this year’s corn crop at 15.82 bbu from a yield of 181 bushels per acre. U.S. farmers are expected to plant 95.3 million acres of corn this year, the most in over a decade.

The USDA is expecting strong new crop corn exports due to lower prices, and also higher feed and residual usage, which is more from market economics than outright demand. The USDA put its initial new crop carryout estimate at 1.8 bbu, 200 mbu less than expected. The average cash corn price projection for this year is $4.35 and for next year is $4.20.

On the global side, world corn consumption is expected to outpace production for the second consecutive year. This is expected to cut the 2025/26 world corn carryout to 277.84 million metric tons, well below the 298 mmt that trade was expecting. This was also below the 287.3 mmt carryout estimate for this year and the lowest world-ending stock estimate in 12 years.

On the soybean side, the USDA put the U.S. 2024/25 carryout at 350 mbu, 25 mbu less than trade was expecting from a 25 mbu increase to exports. On the new crop side, the U.S. yield is estimated at 52.5 bushels per acre and a crop of 4.34 bbu. Exports are forecast to slow from the smaller crop, but domestic crush is forecast to increase as the U.S. biofuel industry expands. This is forecast to drop the U.S. carryout to 295 mbu at the end of the 2025/26 marketing year, which is well into where rationing is needed. Soybean cash values are estimated at $9.95 for the remainder of this year and $10.25 for new crop.

Global soybean balance sheets are forecast to remain tight as well. The USDA is forecasting world ending stocks of 123.18 mmt this year. New crop ending stocks are little changed at 124.33 mmt despite record South American production forecasts.

Wheat balance sheet updates were less than supporting this month. Ending stocks for the 2024/25 marketing year are now at 841 mbu, slightly less than the 850 mbu that was expected. The total U.S. wheat production for 2025/26 is forecast at 1.92 bbu, down 3 percent from last year. The U.S. is forecast to see stronger export competition on wheat, which will be partially offset by stronger milling use. U.S. wheat carryout is still expected to increase to 923 mbu this year, 70 mbu more than trade was forecasting. Average cash bushel projections on wheat are $5.50 for this year and $5.30 for new crop.

The 2024/25 world wheat carryout was 5 mmt more than last month and 4 mmt above the average trade estimate at 265.21 mmt. This is expected to be little changed for 2025/26, with ending stocks estimated at 265.73 mmt, which was also 4 mmt more than forecast.

Beef production for 2025 was cut 280 million pounds this month to 26.42 billion pounds. Declining cattle numbers led to this decline. Beef production for 2026 is forecast to be even less, coming in at 25.14 billion pounds. The loss of feeder cattle imports from Mexico were a primary cause of this lower beef production forecast. Beef exports for 2025 were trimmed 22 million pounds to 2.66 billion, and the initial export forecast for 2026 came in at 2.5 billion pounds. The average steer price is estimated at $214.51 per hundredweight for this year and $222.75 per cwt for 2026.

For pork, the USDA trimmed this year’s production by 80 million pounds to a total of 28 billion pounds. Pork production for 2026 is initially forecast at 28.37 billion pounds. Pork exports were bumped up 103 million pounds for this year to 7.06 billion pounds. The first export forecast for 2026 is 7.14 billion pounds. The average hog value for 2025 held at $65.65 a cwt and the initial forecast for 2026 is at $63.50 per cwt.

The USDA included a statement in this data that U.S. trade policy at the time of the report release was used in determining balance sheet possibilities.

We are starting to see trade show a little more interest in U.S. weather models as hot, dry conditions are forecast for much of the western U.S., including the Plains and Midwest. We are also seeing drier conditions in Brazil. Right now, these are favoring respective planting and harvesting, but before long this will turn bullish. New crop balance sheets are already at a rationing level on soybeans are not far from it on corn to keep risk buyers interested in the market.

The United States has again suspended imports of live animals from Mexico, including feeder cattle. This is due to Mexico’s lagging response to contain its outbreak of new world screwworm in cattle. Mexico now has confirmed cases of screwworm 700 miles from the U.S. border, which is concerning. This import suspension will be on a month-to-month basis until the U.S. sees improvements are made to testing protocols. This will further tighten the U.S. feeder cattle supply, as the U.S. typically imports 100,000 head of feeder cattle from Mexico per month.

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is collected from a variety of sources and is believed to be reliable but is not guaranteed to be accurate. This report is provided for informational purposes only and is not furnished for the purpose of, nor is it intended to be relied upon for specific trading in commodities herein named.