USDA’s decision to ramp up corn demand by 200 million bushels is the largest increase ever for the December Supply and Demand report.

Though it is not uncommon to see USDA adjust demand in the December report, it’s generally a non-event. At least, that was the case until 2024.

This big surprise in the December USDA Supply and Demand report was USDA cutting the projected carryout by 200 million bushels and lowering the U.S. corn carryout number down to 1.738 billion bushels. For wheat, USDA increased overall demand by 20 million bushels. In the soybean complex, we did not see any changes to the balance sheet.

Where did the increased corn demand come from? USDA increased U.S. corn export projections by 150 million bushels and increased corn for ethanol crush by 50 million bushels to give us the 200-million-bushel increase.

The data behind the demand

Why was the USDA so aggressive in increasing the corn demand?

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So far, year to date, the total marketing year export commitments are over 55% of the projected 2.325 billion bushels. That is well ahead of our average pace for this time of year at 51.1% over the past four marketing years.

So, what will we see going forward?

USDA generally makes gradual changes to the supply and demand balance sheet. They don’t want to make a big change in one direction, only to change it back to the other direction next month.

So, with the big changes in the December report, USDA probably will pause on making too many changes for demand in the January 2025 report. The agency likely will watch how the export and crush demand continues to progress over the next few months before making any more changes. If we continue to see strong exports for the next two-to-three months and the demand is not “front-end” loaded like some are claiming, then maybe we see USDA make further increases in corn demand.

Look for production changes

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For the upcoming January 2025 Crop Production report, we will see the USDA give us the final production numbers for the corn and soybean crops from 2024. We did not see any production number changes in December, which is typical. But in January we will see some changes.

The early talk is corn yields might drop a little and soybean yield might increase a little. Time will tell which way USDA will go with production numbers. What we do know is the January report usually provides the market with some fireworks!

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