Corn, soybean stocks lower than expected in USDA report

KANSAS CITY, Mo. — New crop corn and soybean ending stock estimates were lower than trade expectations in the U.S. Department of Agriculture’s supply and demand report on May 12.

Arlan Suderman, StoneX chief commodities economist, reviewed the latest new crop and old crop balance sheets and his expectations of where the numbers will end up.

The supply and demand estimates used yields from the USDA Ag Outlook Forum in February with U.S. corn averaging 181 bushels per acre and soybeans at 52.5.

What does the balance sheet ending stocks looks like with those yields, as well as prospective planting acres for 2025-2026?

Suderman: For corn, I said they would settle for an ending stocks number below 2 billion bushels. They came in even lower than I expected.

I thought the low end, maybe 1.85 billion, and they came in at 1.8 billion bushels. The average trade guess is 2.02.

Where do I eventually expect corn ending stocks to end up? I’d say 2.053 billion bushels for the final numbers for 2025-2026.

USDA had new crop soybean ending stocks at 295 million bushels. That is a low number. It’s still above the lowest trade guess, but that is a low number.

Where USDA will finally end up 15, 16 months from now when we finally get the ending stock Sept. 30, 2026? At StoneX we‘re estimating the final ending stocks number at 391 million bushels.

For wheat, that’s a big supply now at 923 million bushels.

I’m going to talk about how USDA got these numbers and how I disagree with them, but the key is this is what the market’s going to trade.

When you look at the corn and soybean ending stocks numbers overall, it leaves us vulnerable to a weather story in the Midwest growing season.

Breaking down the new and old crop corn balance sheets, what are your expectations?

Suderman: In USDA’s old crop balance sheet, for 2024-2025, they increased corn exports to 2.6 billion, which catches them up within 10 million bushels of my current estimate. That was the most significant change.

That dropped ending stocks to 1.415 billion. I’m at 1.385 billion. I have a little higher domestic use numbers on the food.

It’s new crop export target that I have the biggest problem with. USDA has new crop exports of 2.675 billion. I’m at 2.3 billion.

I don’t see any way possible that we export 2.675 billion bushels considering the size of the South American crop as we now know it and the fact that Ukraine is expected to increase area planted to corn this year, as well.

And those sources — Argentina, Brazil and Ukraine — are expected to be cheaper due to currency exchange rates than U.S corn. I don’t see any way we hit 2.3 billion.

I do expect to see a pullback this next year. I do expect Mexico to still be a strong customer, but I think we‘ll see a pullback from non-Mexico customers. That’s why I’m at 2.3 billion and why my ending stocks are 2.135 billion versus USDA at 1.8 billion on corn.

Feed usage at 5.9 billion for the new crop year is about 50 million above my estimate. Can we get there? Yes, but I’ve got to see the proof to make sure we do get there.

Shifting to the soybean balance sheets, what are your concerns?

Suderman: Soybean demand is something that I’m concerned about, particularly exports. April Chinese imports totaled just 23.19 million metric tons.

That’s down 4 million metric tons from the previous year, and South American soybeans are favored when they do buy due to currency exchange rates, and the fact that they’re producing so much, that tends to weaken their cash basis, as well.

I looked this morning at the port in China after currency exchange rates, and with freight and everything taken into consideration, a bushel of soybeans landing at the port in China from Brazil cost Chinese crushers 70 cents per bushel less than if it originated from United States. And that was before retaliatory tariffs were put on and factored in.

Reducing the tariffs doesn’t change that. We still have a 30% tariff on. It doesn’t change that. China still has a 10% tariff on. That’s what would really affect the imports. It doesn’t change that.

U.S. soybeans are still going to be more expensive, unless we have a trade agreement that forces them to buy soybeans that they don’t need or want from us.

Any good news?

Suderman: Domestic soybean demand is expected to get a boost very soon. The Environmental Protection Agency is expected to announce its revised biomass diesel production mandate soon.

The industry asked for 5.25 billion gallons. We‘re expecting 4.4 to 4.75 billion. That’s a big increase from the current 3.35, but there’s still a chance that we could hit 5 billion.

Announcements on the small refinery exemptions, the 45Z tax credits and E15 are likely to come in a later date.

I believe permanent E15 will take an act of Congress. That is simply not high on the agenda right now with the other aggressive agenda that Republicans have.

If we look at Renewable Identification Number generation, we‘ve had a substantial drop at the first of the year. Used cooking oil continues to trade cheapest of all the alternatives from making the biofuel.

Used cooking oil continues to flow into the United States. Now the reciprocal tariffs in April may have shut that down. I’ll be anxious to see the April data, but we‘re still fighting that.

What are your thoughts on the tariff situation as it relates to agricultural trade?

Suderman: The 90-day trade deal with China is positive, but it really does nothing yet for corn and soybeans.

I’m tired of seeing headlines about how China’s going to buy more from Brazil now because of the tariff war. They were buying as much as they could from Brazil before because they were simply cheaper. So, how does that change this?

Every year, Brazil expands production as much as they can and they have more to sell and those bushels are going to be cheaper, and so China buys more from Brazil and needs less from us. That pattern is continuing.