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Insight Focus
US grains fell on a bearish November WASDE after early-week gains. Corn still ended the week slightly higher, while wheat finished lower. Higher US stock-to-use ratios and strong global crops suggest limited upside for Chicago corn. Ukraine’s delayed harvest may offer some support, but overall, we expect potential further downside.
US grains plummeted last Friday on a bearish November WASDE after having rallied since the beginning of the week. Still, the week was positive for corn but negative for wheat.
With some information out of the US released on Friday, the market should try to find some direction now. The release of the November WASDE was, in our opinion, bearish, with both corn and wheat stocks higher than expected. Wheat production across many key producing countries was also revised upward.
The higher stock-to-use ratio in US corn and optimal crops around the world should mean the upside for Chicago corn has likely ended. Only Ukraine’s very delayed harvest can provide some support and possibly some upside to Euronext corn. But overall, we would expect some consolidation of last Friday’s losses and perhaps some further downside risk.
There are no changes to our estimate for Chicago corn to average USD 4.18/bushel during the 2025/26 (September/August) crop. The average price since September 1 is running at USD 4.21/bushel.
Chicago Corn Rally Stalls on Bearish WASDE
Corn in Chicago rallied at the start of last week and continued rallying through Thursday, then sold off on Friday with the publication of the November WASDE, almost erasing all weekly gains and finally closing with gains just below 1% week on week.
The reopening of the US government and the publication of the long-awaited November WASDE disappointed the market, with a much lower-than-expected reduction in US corn yield and a sizable upward revision of 207 million bushels of initial stocks.
The 2024/25 US carry was increased by 207 million bushels, coming from 25 million bushels of higher production (slightly higher acreage) and 183 million bushels of lower feed and residual demand. This higher carry for 2025/26 came with a 0.7 bushels/acre downward revision to yield, now at 186 bushels/acre vs. 186.7 bushels/acre before, resulting in 62 million bushels less production.
Exports were increased by 100 million bushels, resulting in ending stocks for the new crop projected 44 million bushels higher at 2.14 billion bushels, or 13.3% stock-to-use, up from 13.1% in the September WASDE.
Source: USDA
This was somewhat disappointing, as the market was not expecting such an upward revision of old-crop ending stocks and was also waiting for a larger reduction in new-crop yield. The Bloomberg survey showed 184 bushels/acre versus 186 bushels/acre in the WASDE for corn yield.
World ending stocks for 2025/26 were basically unchanged, with the biggest change being Mexican production up by 1.2 million tonnes. The yearly variation for world stocks is projected at –10.3 million tonnes (a stock draw).
The WASDE pinned Chinese production at 300 million tonnes, higher than estimates of 295 million tonnes. Conab in Brazil increased its corn production forecast marginally to 138.8 million tonnes, up from 138.6 million tonnes before. This compares with 131 million tonnes in the November WASDE.
Harvesting of US corn is 92% complete versus 95% last year (Bloomberg survey). Harvesting in France is 96% complete versus 69% last year and the five year average of 90%. Corn condition is 59% good or excellent, unchanged week on week and vs. 76% last year.
Corn harvesting in Ukraine is 62% complete vs. 88% last year. Corn planting in Argentina is 36.6% complete vs. 40.3% last year. Crop condition is 76% good or excellent, down three points week-on-week and versus 29% last year.
Wheat Weakens as WASDE Lifts Production and Stocks
US wheat followed corn at the beginning of last week, but Friday’s sell-off more than offset the earlier rally, and the week closed negative. Euronext wheat didn’t remotely follow Chicago and instead traded negative from the beginning of last week on ample supplies.
The November WASDE increased US carry by 57 million bushels, all coming from 58 million bushels of higher production. This was caused by higher acreage and a 0.6 bushels/year increase in yield.
World ending stocks were up by 7.37 million tonnes to 271.4 million tonnes, a yearly stock build of 10 million tonnes. Besides the upward revision in US production, a number of other countries were also revised upward.
Argentina was up 2.5 million tonnes, Australia 1.5 million tonnes, Canada 1 million tonnes, EU 2.2 million tonnes and Russia was up 1.5 million tonnes.
Source: USDA
BAGE in Argentina projected 24 million tonnes of wheat production in 2025/26, which would be a record and up from 18.6 million tonnes produced last crop year. This compares with 22 million tonnes projected in the November WASDE.
Winter wheat planting in France is 89% complete versus 76% last year and the five-year average of 83%. Conditions are 98% good or excellent versus 88% last year. Ukraine winter wheat is 94.5% planted.
On the weather front, mild temperatures and dry weather are expected in the US corn belt. Brazil’s Center-South is expected to be rainy, as is Argentina. Cold and rainy weather is expected across Northwest Europe and in the Black Sea region.
