Nearly every analyst and pundit expected corn yield and production to drop in Monday's USDA report. USDA shocked them all.

CORN

With nearly every analyst and crop scout in the U.S. predicting a January decline in both corn yield and production, they got just the opposite. To add insult to injury, both the harvested acres rose sharply, and Dec. 1 corn stocks set a new record on the upside.

The Dow Jones survey before the report was looking for a 2.1-bushel-per-acre (bpa) decline in yield to 183.9 bpa and a drop in production of 228 million bushels (mb) to 16.544 billion bushels (bb). Those numbers instead were a record-large 186.5 bpa -- up a half-bushel per acre from December -- and an increase of 300 mb to a record-large 17.02 bb production in 2025. As if that wasn't enough to make bulls run for the door, the Dec. 1 corn stocks came in at a record 13.3 bb and some 260 mb higher than expectations. Oh, and one more thing: Harvested acres rose by a whopping 1.3 million from December as acres for silage were reduced. The only demand change was an increase in feed and residual of 100 mb and a decrease of 10 mb in food, seed and industrial of 10 mb, leading to a net 90 mb gain. That sent ending U.S. corn stocks to a burdensome 2.227 bb -- up nearly 200 mb from December and 245 mb higher than the average Dow Jones trade estimate.

On another bearish note, U.S. sorghum production rose 27% from a year ago at 437 mb with harvested acres up 7% and yield rising 11.3 bpa above last year. Sorghum prices have been dirt cheap, with little interest from China, and have given corn plenty of competition in the Western and Southern Plains feed and ethanol arenas.

On the world front, there were just a few notable changes, with USDA failing to increase Argentine corn production from 53 million metric tons (mmt) (2.08 bb) despite most analysts and scouts expecting Argentina to rise to a record of over 58 mmt (2.28 bb). On a side note, even though China has been a no-show for U.S. corn demand lately, the WASDE report raised that corn crop by 6.25 mmt (246 mb) to 301.25 mmt (11.86 bb). World ending stocks of corn at 290.9 mmt (11.45 bb) were well over the December stocks of 279.2 mmt and the average trade estimate of 280 mmt.

It seems bullish corn traders didn't have a chance, with spot March down more than 25 cents at midday and finishing down 24 1/4 cents at $4.21 1/2.

SOYBEANS

There was a lot less shock and awe in the soybean data from the January report, but what was changed was not bullish. Soybean yield, expected to drop by 0.3 bpa due to late-season dryness, instead remained unchanged at a record 53 bpa. With a modest bump in harvested acres, soybean production rose 9 mb from December to 4.26 bb. However, the slow pace of soybean sales until just recently had USDA forced to lower exports by 60 mb to 1.575 bb. And that number has the potential to go even lower, as Brazil is in the middle of a record-large harvest with prices sharply discounted to those from the U.S. On a positive note, U.S. soybean crush was raised by 15 mb to a record-large 2.570 bb. The net effect was that ending soybean stocks in the U.S., rather than falling a bit, rose by a net 60 mb to 350 mb. Traders had been looking for a decrease of just 11 mb to 290 mb. .

On the world side, there were few changes, but Brazil production, as expected, was increased by 3 mmt to a record 178 mmt (6.54 bb). This may still end up being light, with several analysts and grain firms looking for a crop that could be even 2 mmt to 6 mmt (220 mb) higher than that. World ending stocks of soybeans rose to 134.41 mmt (4.94 bb) compared to December's 122.4 mmt (4.5 bb).

March soybeans at midday were down over 12 cents per bushel, finishing down 13 1/2 cents at $10.49.

WHEAT

Wheat was expected to be only modestly affected by the January report with regard to the balance sheet, and that turned out to be the case. However, what changes were made were mildly bearish on the domestic side. While old-crop wheat carry-in was increased by 4 mb to 855 mb, feed and residual was reduced by 20 mb, with the net effect being wheat ending stocks rising by 25 mb to 926 mb. Traders were looking for ending stocks to be lower at 897 mb (average guess), but the number was 28 mb above that. That, along with world changes and wheat seeding data, sent wheat to moderate losses on Monday.

On the world side, and pretty much as expected, the nearly constant increase in major exporter production and supply did not stop on Monday. Argentina's wheat crop was raised 3.5 mmt to 27.5 mmt (1.01 bb), and Russia's production rose by another 2 mmt to 89.5 mmt (3.29 bb). Global ending stocks rose from 274.9 mmt to 278.25 mmt (10.2 bb). While these numbers were mostly expected, all eyes were on the wheat seeding report. That too, was more bearish than traders had expected at 32.99 million acres. The average trade estimate pre-report was 32.3 ma. In effect, the number was only 200,000 acres less than the last USDA estimate of 33.2 ma.

Wheat markets had a wide range and finished lower with Chicago March down 6 cents and Kansas City off 3 1/2 cents at $5.26 3/4, but well below the morning highs.

FINAL THOUGHTS

The January 2026 USDA Crop Production, quarterly Grain Stocks and Wheat Seedings reports provided a major shock, especially to corn traders, with a record-breaking yield and production and record December stocks, leading to sharp losses by the close. Soybeans were modestly bearish, but with room to move the Brazil production number higher and U.S. exports lower, the advantage may go to the bears. In wheat, the ongoing and relentless story of growing world supply and competition did not end on Monday. However, even in light of that, U.S. wheat exports continue to overperform -- just about the only good news in a sea of bad.

Dana Mantini can be reached at dana.mantini@dtn.com

Follow Dana Mantini on Twitter @Mantini_r

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