Corn futures extended a recent rally and surged to two-month highs after USDA sharply reduced its estimates for U.S. and global stockpiles in 2025 and forecast the second-most corn exports on record, indicating global grain supplies may not be as burdensome as once thought.

Soybeans also climbed after USDA, in its monthly Supply and Demand update today, unexpectedly left its 2025 harvest projection for Brazil’s crop unchanged at 169 million metric tons (6.21 billion bushels). Analysts expected a slight increase. USDA also sharply hiked U.S. soyoil exports, nearly doubling its 2024/25 forecast to 1.1 billion pounds.

Wheat futures also rose after USDA lowered its U.S. stocks forecast more than expected.

In late trading, March corn futures rose 7.25 cents to $4.49 after climbing as high as $4.50, the contract’s highest intraday price since $4.5225 on October 2. January soybeans gained 4.75 cents to $9.9475, while March SRW wheat rose 3.25 cents to $5.62.

The following are brief summaries based on the Crop Production and Supply and Demand reports:

Corn

USDA slashed its estimates for U.S. corn stockpiles at the end of the 2024/25 marketing year next summer to 1.738 billion bushels, down 10% from a November estimate and 22 million bushels below 2023/24 ending stocks. Analysts expected a reduction closer to 1.906 billion bushels.

The tighter corn stocks outlook reflects strong demand from major users that may help absorb heavy supplies from the just-completed near-record U.S. harvest.

USDA hiked its 2024/25 export forecast by 150 million bushels to 2.475 billion bushels, an 8% improvement over 2023/24 exports and the second highest ever, behind only the 2.747 billion bushels exported in 2020/21. USDA also raised estimated 2024/25 food, seed and industrial use by 0.7% to 6.89 billion bushels, the highest since 2017/18. Ethanol demand was increased almost 1%, to 5.5 billion bushels.

"U.S. corn has been the cheapest option for many buyers, depending on freight, sending them our way to get their needs filled," StoneX economist Arlan Suderman told Reuters.

USDA also cut its forecast for global corn stockpiles at the end of 2024/25. The agency dropped its estimate to 296.44 MMT (11.7 billion bushels), down 2.5% from a November figure and down 6.3% from 316.22 MMT at the end of 2023/24.

For South America, USDA left its projections for corn crops in Argentina and Brazil unchanged at 52 MMT and 127 MMT (2.05 billion bushels and 5 billion bushels), respectively. Analysts expected a slight decrease in Argentina’s crop and a slight increase in Brazil’s crop.

Soybeans

USDA kept its Brazil soybean harvest forecast unchanged, which surprised traders after ample rains across key growing areas in recent weeks prompted some private consultants to boost their crop estimates to as high as 172 MMT.

However, USDA did hike its Argentine soybean crop estimate to 52 MMT from 51 MMT. Analysts expected USDA to slightly reduce Argentina’s crop to about 50.86 MMT.

For the U.S. balance sheet, USDA held its 2024/25 ending soybean stocks estimate unchanged at 470 million bushels, up 37% from 342 million bushels at the close of 2023/24. Estimated U.S. exports were unchanged at 1.825 billion bushels, up 7.7% from 2023/24.

USDA also forecast global soybean stockpiles at a record 131.87 MMT (4.84 billion bushels), up slightly from a November estimate of 131.74 MMT and up almost 18% from 2023/24.

Wheat

USDA’s report carried some potentially bullish signals for the wheat market. Projected U.S. wheat stocks at the end of 2024/25 were lowered to 795 million bushels, down from 815 million bushels in November and a larger drop than analysts expected. Forecast supplies would still be up 14% from 2023/24.

Also, USDA hiked its estimate for 2024/25 wheat exports to 850 million bushels, up from 825 million bushels in November and up 20% from 2023/24 exports.

On the global balance sheet, USDA raised its forecast for wheat stockpiles next year more than analysts expected, though supplies are still expected to be historically tight. USDA pegged global 2024/25 ending wheat stocks at 257.88 MMT, up from 257.57 MMT in November but down 3.6% from 2023/24 and a nine-year low.