Corn prices plunge 6% after USDA sharply raises crop forecasts for China and the US

The United States Department of Agriculture (USDA) unexpectedly sharply raised corn crop forecasts for the United States and China in its January supply and demand report, leading to an increase in the estimate of world production and stocks in the updated balance for the 2025/26 MY and a collapse in corn quotes in Chicago.

March corn futures in Chicago fell 6.1% to $166/t after the report was released and are trading 4.5% lower than after the December report.

The forecast for the US corn harvest in 2025/26 MY has been increased by 6.81 million tons to a record 432.34 million tons, which will exceed the previous record of 2023 by 40 million tons and last year's figure by 54 million tons, and will put a lot of pressure on the markets.

USDA experts increased the US corn yield forecast by 0.5 bushels/acre to 186.5 bushels/acre, and the estimate of the area to be harvested by 1.3 million acres (since July 2025, the harvested area has increased by 4.5 million acres, as more corn was harvested for grain rather than silage due to ideal conditions).

The forecast for US corn consumption has been raised by 2.3 million tons to 334.5 million tons (compared to 311.6 million tons last season) due to increased feed consumption, but analysts did not expect such an increase, so some of the volumes may later go into ending stocks.

In the quarterly report on grain stocks as of December 1, 2025, corn stocks in the United States were estimated at 337.4 million tons, which is 30.7 million tons higher than the corresponding figure last year and significantly higher than analysts' estimate of 329.2 million tons.

The world corn balance for the 2025/26 MY has undergone the following changes compared to December estimates:

• The forecast for initial stocks was increased by 1.3 million tons to 294.7 (315.45 in 2024/25 MY) million tons due to the balance adjustment for 2024/25 MY, in particular, a reduction in global consumption by 1 million tons to 1,251.6 million tons.
• The forecast for world production was increased by 13.05 million tons to a record 1296 (1230.86) million tons, in particular for the USA - by 6.81 million tons to a record 432.34 (378.3) million tons, and China - by 6.24 million tons to 301.24 (294.9) million tons. For Brazil and Argentina, the forecasts were left unchanged at 131 and 53 million tons, respectively, although local analysts have already increased their estimates to 135-138 and 55-57 million tons, although there is still half a year until the end of the harvest.
• The forecast for global consumption has been raised by 2.6 million tonnes (including 2.3 million tonnes for the US) to a record 1,299.8 million tonnes, which would be 48 million tonnes higher than the 2024/25 MY figure. But analysts believe these figures are too overestimated, especially given the further decline in consumption estimates last season.
• The forecast for world exports was left unchanged at 205.1 million tons (for the 2024/25 MY, the forecast was reduced from 187.14 to 186.6 million tons).
• The forecast for world imports was left unchanged at 190.11 million tons (for the 2024/25 MY, the forecast was increased from 185 to 186.1 million tons).
• The forecast for ending stocks was sharply increased by 11.76 million tons to 290.91 (294.7) million tons, in particular for the USA - by 4 million tons to 56.6 (39.4) million tons, and China - by 6.24 million tons to 180.15 (191.9) million tons.

In subsequent reports, we can expect a further decrease in the consumption forecast against the backdrop of a fairly high supply of both feed wheat and meal this season, which will contribute to an increase in global corn stocks and put pressure on quotes until the results of the harvest in South America and sowing in the USA are received.