Soybean futures led the way higher on Tuesday, resuming rallying efforts after a brief pause on Monday. Meanwhile, corn and wheat markets were mixed as USDA made very few changes to U.S. and global balance sheets but did reiterate multi-year highs in grain reserves.
WHEAT:
March Kansas City wheat futures rose 1 3/4 cents to $5.30 1/2. Meanwhile, Chicago and Minneapolis wheat futures were lower. Wheat futures were overall mixed after a largely neutral USDA report which had bullish and bearish aspects to be found. From a technical standpoint, March KC futures remain resilient at trendline and moving average support in the mid-$5.20s. The bullish target is near $5.50 currently.
USDA made only one change to the U.S. wheat balance sheet on Tuesday, a 5-mb cut to the food demand category. This inflated ending stocks by the same amount to 931 mb, still the largest with in the U.S. in six years. It was likely frustrating to some bulls to see USDA choose not to touch up wheat exports, with commitments to date still 18% ahead of 2024-25 with USDA’s 900-mb forecast representing a 9% year-over-year increase. It is likely that less expensive offers out of Russia and Argentina are keeping the government conservative in their outlook.
On the world balance sheet, world production and stocks fell for the first time since the August WASDE, as it would appear the late 2025 supply surge has reached its apex at least for the time being. World stocks (not including China) are still the largest in eight years at 152.66 mmt. Meanwhile, USDA did increase their forecast for exports out of Argentina by 2 mmt to a record 18 mmt, reinforcing the above theory that increased competition is keeping USDA from increasing the U.S. export outlook just yet.
The DTN National HRW Index finished Monday at $4.61, while the DTN National HRS Index was $5.55. Tuesday’s futures close and Monday’s national average soybean basis of 67 cents under the March board for HRW, and 16 cents under the March board for HRS, would indicate the indices for Tuesday afternoon to be near $4.63 and $5.53, respectively.
Corn
March corn futures closed at $4.28 3/4, unchanged from Monday. May futures were up a 1/4 cent to $4.37 1/4. Trade in the corn market was thin on Tuesday amid a quiet USDA release, with March futures able to hold above immediate trendline support near $4.27. The 50-day moving average near $4.37 is the short-term bullish target.
Tuesday’s WASDE report featured only one change to the U.S. balance sheet, with USDA increasing their corn export forecast by 100 million bushels (mb) to 3.2 billion bushels (bb). This pushes the year-over-year pace to a 15% increase over last year’s record, with commitments 31% ahead of last year as of the end of January, suggesting future revisions higher are still in play. The resulting 100-mb cut to U.S. ending stocks to 2.127 bb was slightly larger than analysts were expecting but still represents the largest corn inventory in the U.S. in seven years if true.
On the world balance sheet, USDA made minimal changes, with the decline in world corn stocks to 288.98 million metric tons (mmt), coming almost directly as a result of the aforementioned changes to the U.S. sheet. USDA left 2026 corn crop estimates unchanged for both Brazil and Argentina, a fair move at this point given USDA’s estimate for Argentina already trails local estimates which have softened due to a dry January, while Brazil is just now planting the safrinha corn crop which makes up roughly 75% of yearly production.
The DTN National Corn Index finished Monday at $3.96. Tuesday’s futures close and Monday’s national average corn basis of 33 cents under the March board would indicate the index on Tuesday afternoon to be near $3.96.
