The Brazilian firm CONAB, that country’s version of the USDA, has released its updated 2025/26 crop estimates. CONAB held its corn crop estimate steady this month at 138.87 million metric tons. Corn exports were also unchanged at 46.5 mmt, but ending stocks still dipped 1.5 mmt to 12 mmt as domestic demand is rising. The group’s soybean crop estimate is now 176.12 mmt, down 1 mmt from the December estimate. CONAB made a slight reduction to exports at 111.8 mmt and also trimmed ending stocks to 11.3 mmt. Brazil’s wheat crop was trimmed to 7.87 mmt from last months 7.96 mmt. This led to a slight increase in imports to 6.77 mmt, but also an increase to carryout to 2.24 mmt.

The USDA is currently predicting Brazilian crops of 178 mmt on soybeans, 131 mmt on corn, and 8 mmt on wheat.

Harvest is starting to gain momentum in Brazil and will soon start to answer these production questions. The Brazilian state of Mato Grosso is reporting a soybean harvest pace of 7 percent, well ahead of last year’s 1.5 percent on this date. Dry weather has favored Brazil’s harvest, but rains will start to slow this down. This rapid harvest has some analysts questioning crop size, especially with a few firms cutting their crop estimates. The real question is when these soybeans will start hitting the global market, as growing domestic soybean demand is competing with the export market.

Mato Gasso is the most watched Brazilian soybean producing state with a projected crop of 51 mmt, more than all of Argentina.

Even with harvest taking place we are seeing interest in South American weather as hot, dry conditions continue to affect Argentine crops. These conditions have led to multiple weeks of lower ratings on the country’s soybean crop. Sources in Southern Cordoba are also claiming corn loss is taking place. Rain is in the forecast for Argentina and Brazil as well, but for some areas these may be too late to provide crop relief. These conditions are also slowing the last of Argentina’s plantings, further bringing production into question.

Sources are now stating that China has reached its 12 mmt soybean purchase agreement with the United States. The question now is if China will continue to buy, or they see their coverage at a level that will reach the Brazilian import arrivals. The Brazil soybean harvest is just getting underway, and it will be a few weeks before exports commence. Soybean crushers in China report having limited coverage for spring needs and have been booking soybeans at auction instead to guarantee arrival. China has stated it will likely suspend auctions until the Lunar New Year celebration ends in late February. The answer to China’s future soybean purchases will likely be seen before then.

A factor that is having more of an impact on global commodity trade with China is that country’s declining population. China is reporting a 2025 population of 1.4 billion people, down 2.4 million from the prior year. This is the 4th consecutive year of a shrink in the country’s population and is starting to be noticed in commodity consumption. China is also seeing a record low birth rate which will further trim future commodity needs. A shift in Chinese diets is also affecting commodity needs, especially with elevated beef demand.

While China has been cutting back on its pork production to support prices, the country has seen growth in beef production. China’s beef production in 2025 totaled 8.01 mmt, an increase of 2.8 percent from 2024. The biggest increase came from Inner Mongolia with 1.01 mmt, a 14.2 percent increase from the prior year. China’s 2025 cattle herd totaled 8.7 million head, a year-to-year increase of 12.7 percent. A shift in China’s diet to higher beef content is absorbing this added production.

The January cattle on feed report leaned a little more bearish than trade expected. The January 1st U.S. cattle herd was down 2 percent from last year at 11.5 million head. December placements were larger than expected at 1.5 million head, 95 percent of last December’s volume. December marketings were 2 percent higher than a year ago at 1.77 million head. Until cattle placements outpace the prior year’s it will be difficult to pressure the complex without a drop in beef demand.

One build in U.S. livestock is in the dairy herd. The U.S. had a reported 9.14 million head of dairy cows at the end of December, 222,000 more than a year ago. This was 9,000 more head at the end of November and was the leading cause of a 4.6 percent increase in milk production for the month. Until this trend turns, milk values will continue to see price pressure.

The December 31st cold storage report showed U.S. meat stocks are building. The U.S. beef inventory on December 31st was 437.46 million pounds, 3 percent less than in November but 3 percent less than December 2024. This was the tightest December U.S. beef supply since 2009. Frozen pork supplies were 390.55 million pounds, 5 percent more than last month and 2 percent less than last year. This was the lowest December pork supply since 1997. The pork belly supply increased 74 percent from November at 36.9 million pounds, which was up 4 percent on the year. Total U.S. red meat stocks at the end of December were up 4 percent from November but down 3 percent from last year.

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