All eyes were on today’s World Agricultural Supply and Demand Estimates report from USDA, with the January release among the most hotly anticipated monthly editions. And it was indeed a market-mover after the agency showed lower-than-expected yield and production estimates for both corn and soybeans.

Corn futures soared over 15 cents to the highest levels since mid-June and soybean futures jumped to two-month highs after USDA’s final Crop Production estimates for the 2024 harvest came out well-below trade expectations, indicating global supplies may not be as burdensome as once thought.

Around midday, March corn futures surged 13 cents to $4.69 per bushel, after earlier touching $4.7250, the contract’s highest intraday price since June 20. March soybeans rallied 24 cents to $10.23 after reaching $10.3350, the highest since November 12. March SRW wheat was up 2.75 cents at $5.3675.

“Big drops caught a lot of people off guard,” according to Tyler Schau, partner with AgMarket.Net. “In corn, we were a full two bushels per acre lower than what any analyst had predicted. Soybeans also saw a much larger decrease in yield than what was expected.”

Quarterly stocks had corn and soybeans below analysts’ expectations, with wheat slightly above.

Corn

USDA slashed corn yield estimates by 3.8 bushels per acre to 179.3 bpa. That put analysts on their heels after offering an average trade guess of 182.7 bpa. That shoves total production estimates back below 15 billion bushels, with a new projection of 14.867 billion bushels.

“One of the things that we have talked a little bit about in some of our internal meetings that late dry and heat that we saw in a large swath of the corn growing area of the United States caused for some light test weight issues and also took the top end off of some yields,” Schau says. “I think that just takes time for the system to figure out, and the USDA has taken their time as they're kind of known to do, but it just caught a lot of people off guard by taking almost four bushels off the yield estimate from the previous month.”

Regarding demand, total corn use shifted 75 million bushels lower to 15.1 billion. That is due to cuts in feed and residual use (50 million bushels) and exports (25 million bushels). Supply fell more than use, so USDA ultimately lowered corn stocks by 198 million bushels. The season-average price received by producers increased 15 cents to $4.25 per bushel.

USDA didn’t make any changes to its South American corn production estimates. That leaves Argentina at 2.008 billion bushels and Brazil a sliver under 5 billion bushels.

“Another big takeaway as you dig deeper through the reports is world ending stocks are now at the lowest level we’ve seen since 2014,” Schau adds. “With lower corn prices, we're seeing demand resurge and it's resurging worldwide.”

Soybeans

As with corn, USDA levied unexpected cuts to soybean yield and production estimates. The average yield eroded to 50.7 bpa, versus the average trade guess of 51.6 bpa. Production stumbled from 4.561 billion bushels in December down to 4.366 billion bushels. USDA attributed the downgrades to decreases in several key states, including Indiana, Kansas, South Dakota, Illinois, Iowa and Ohio.

Soybean ending stocks slid 90 million bushels lower to 380 million. The season-average price in the current marketing year held steady from last month, at $10.20 per bushel. Soymeal prices increased $10 per short ton to $310, while soyoil prices held steady at 43 cents per pound.

In South America, USDA held its soybean production estimates steady, with Argentina at 1.911 billion bushels and Brazil at 6.210 billion bushels. There are more bearish and more bullish Brazilian estimates out there, but USDA’s projection would be a record-breaking volume, if realized.

USDA’s forecast for global soybean ending stocks was also supportive of price gains today. The agency trimmed its estimates from 131.87 million metric tons in December down to 128.37 MMT. Analysts were expecting an increase, in contrast, with an average trade guess of 132.2 MMT.

Wheat

USDA’s new outlook for wheat noted “slightly larger supplies and domestic use, unchanged exports, and marginally higher ending stocks.” Supplies shifted 5 million bushels higher to 130 million on some hard red spring imports. Exports held steady at 850 million bushels, but USDA did note some minor offsetting by-class changes.

All told, 2024/25 ending stocks moved 3 million bushels higher to 798 million, which is a 15% year-over-year increase. The season average farm price faded a nickel lower to $5.55 per bushel.

USDA also offered a look at U.S. winter wheat plantings, which the agency pegs at 34.115 million acres. That was above the average trade estimate of 33.366 million acres and exceeds 2024 plantings by 725,000 acres.