Soybean futures jumped to two-year highs after the USDA's first look at the 2026-27 U.S. supply and demand balance showed tighter-than-expected soybean stocks and stronger demand. The agency projected U.S. soybean ending stocks for 2026-27 at 310 million bushels, 30 million bushels lower than 2025-26 and well below analyst forecasts, a move that lifted nearby new-crop soybean contracts above $12 per bushel. Wheat also rallied sharply after USDA cut its winter-wheat outlook, while corn held gains despite a still-large carry-in.
Supply and demand shifts
USDA put 2026-27 U.S. corn ending stocks at 1.957 billion bushels, down from 2025-26 but slightly above the trade's expectations, with production forecast at 15.995 billion bushels and exports at 3.15 billion. The agency's U.S. winter-wheat estimate fell to about 1.048 billion bushels, a near six-decade low driven by deep drought in the Southern Plains and a sharp decline in hard red winter supplies, which USDA pegged at 514.8 million bushels. Those wheat cuts pushed HRW futures to session limits and tightened milling and feed wheat availability.
Biofuels, crushing lift soy demand
USDA and market participants cited strong crushing and biofuels demand as a key support for soybeans even as U.S. exports face competition from another large Brazilian crop. Proposed increases in U.S. biofuel blending mandates and higher global interest in vegetable oil for diesel blending have pushed processors to run near full capacity, strengthening domestic soybean use and underpinning farm-price forecasts.
Market reaction and trader notes
November soybeans closed above $12.00, December corn traded near $5.02 and nearby HRW wheat contracts hit multi-year highs amid the supply cuts. Jeremy McCann of Farmer's Keeper said the initial 2026-27 balance sheet reinforced a bullish market picture and that geopolitical and trade developments could add volatility. Brady Huck of Empower Ag Trading warned the market carries sizable fund long positions that increase the risk of abrupt long-liquidation moves, and he noted USDA used a trendline corn yield of 183 bpa in its baseline.
Prices and producer decisions
USDA raised its average 2026-27 farm-price outlook to $4.40 for corn and $11.40 for soybeans, while forecasting an average cash wheat price near $6.50. Traders and advisers are urging producers to use option strategies and staged sales to capture current rallies; Huck recommended short-dated call sales to keep upside through critical production months and put strategies to protect downside while leaving room to benefit from higher markets. Crude oil strength and oil-market disruptions were cited as additional support for grain and oilseed prices.
Global context and key figures
On a global basis USDA projects world corn stocks at 277.54 million metric tons and soybeans at 124.78 MMT for 2026-27, supporting the agency's tighter-than-expected U.S. balances. USDA's 2026-27 U.S. soybean production is forecast at 4.435 billion bushels.
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