WASDE Delivers Corn Export Shock — But Price Yawns
USDA’s May Report: A Shift in Corn Supply-Demand Outlook
On Monday, May 12th, the USDA released its latest World Agricultural Supply and Demand Estimates (WASDE), and the figures surprised many. Most notably, 2024/25 corn export projections were raised by 50 million bushels to 2.6 billion. This could push projected carryout into the mid-to-low 1.3 billion range — with even more bullish revisions possible in June. That sets the stage for a tighter outlook than many traders were bracing for, especially if demand stays firm.
2025/26 Forecasts Show Unexpected Tightness
Domestic corn carryout projections for 2025/26 came in well below expectations, a move driven by USDA's assumption of strong exports. Internationally, global corn carryout landed 20 million metric tonnes (mmt) under the average trade guess — and even 2 mmt below the most bullish published estimate. That gap speaks volumes about how aggressive USDA is in forecasting demand strength well into the next marketing year.
Why USDA's Confidence in Corn Exports?
USDA's aggressive export outlook hinges on record-low stocks-to-use ratios for both major exporters and importers. This highlights how vulnerable the global supply chain is to disruptions. Should a major player face supply issues, there's little room for error in covering global demand.
USDA seems to be betting on continued momentum in U.S. competitiveness, helped by currency tailwinds, strong demand from non-China buyers, and a thinner global balance sheet overall. That mix creates a scenario where any production hiccup, even regionally, could further tighten the balance.
Market Reaction: Muted Despite Bullish Data
Despite bullish surprises in the report, corn prices didn’t spike as expected. Here’s why:
Disbelief in Projections: The market may doubt USDA’s optimistic demand forecast for 2025/26.
Soft Cash Markets: Weak basis along river markets and soft cash prices may signal less tightness than carryout suggests.
Downward Price Momentum: The broader trend in corn futures is still bearish.
Complacency or Déjà Vu?: A similar scenario unfolded last year. Low exporter/importer stocks started to impact futures spreads late June/mid-July.
The market may be underestimating tightening fundamentals — again. That misread could eventually offer a window of opportunity, particularly if weather, exports, or South American production come under pressure.
Garret Brown
Founder | Market Advisor
Having grown up on a farm, Garret respects the wide range of skills needed to run a successful operation and recognizes farmers are often stretched thin trying to do it all. This understanding, along with his affinity for markets, fuels his drive to make tough marketing decisions simpler for farmers.
Leveraging his experience in grain origination and margin management, Garret analyzes technical and fundamental market information. With the assistance of CODAK’s algorithmic signaling platform, he puts together buy/sell recommendations while working with the CODAK team to create strategies that accommodate each farmer’s personal risk tolerance, on-farm storage capacity, and break-evens.