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Canada Know-Risk Market Outlook | USDA Report Analysis

By: Craig Turner, Senior Risk Management Consultant

 DEC WASDE | The USDA released their December WASDE report at 11am CT.  The report was neutral based on expectations for soybeans and wheat.  The report was mildly bullish for corn as exports rose to 3.2 billion and ending stocks are now 2.029 billion.

The first table below shows the most important numbers for the WASDE. The second chart below adds some color on exports and ending stocks.

Here are my main takeaways

Wheat - Still a dog.  It is hard to get bullish wheat until we have a drought, major geopolitical issue in a major exporting region, or we start getting 44mm acres planted per year in the US.  We are currently at 45+ but the USDA baseline projections has wheat at 44mm next year and going forward.  I'm not bullish wheat in 2026, but I could start to get neutral in 2027 and bullish in 2028 if acres do go down to 44 million.

Soybeans - The USDA decided to not do anything for US soybeans, and I'm not surprised.  There are too many unknowns about the US/China soybean trade agreement, so I can see why the USDA decided to skip it for December. I do think they need to address the 12 MMT for the 2025/26 marketing year in the Jan report, which could be very interesting for the soybean market, especially for Nov 2026 Soybeans.

Corn - Exports at 3.2 billion is a bullish surprise, but it only brings down ending stocks to 2 billion and 12.5% stocks/usage.  The January report could have a bullish surprise, and a big rally, if yields come down to 184 or lower.  If exports are 3.2 billion and ending stocks are 2 billion, it only takes a 2 bpa yield reduction to get corn back to a 10% stock/usage.   That could put corn in the high $4s.  Anything lower than 184 in the Jan WASDE has the potential to put corn north of $5 across the board.

For now I like selling deferred contracts in wheat and selling calls on rallies.  Short straddles are interesting too. 

For soybeans I think we could fill the $10.75-$10.82 gap in the March contract, and if we do I like getting long.  Soybeans needs some S. America weather adversity. 

As for corn, I want to be bullish heading into the Jan WASDE.  If yields come down we will rally. If yields stay the same I think we trade in range.  I don't see a lot of downside at this price level based on how strong demand has been.  We can bull spread futures, use collars, or buy call spreads/write put spreads.

DEC WASDE RESULTS

image-20251209113911-1image-20251209121152-1

Crop2025/26 Exports (U.S.)2025/26 Ending Stocks (U.S.)Other Relevant Notes
Corn~ 3.200 billion bushels (Reuters)~ 2.029 billion bushels (Reuters)Export forecast raised vs. prior month. Stocks trimmed vs earlier outlook — but carry-out remains very large. (Reuters)
Soybeans~ 1.635 billion bushels (Reuters)~ 290 million bushels (Reuters)Export forecast left unchanged despite resumption of sales to major buyers; carry-out remains near the lower end of recent years. (Reuters)
Wheat— (exports ~ 900 million bushels per recent report) (Farm Progress)~ 901 million bushels Wheat supply has increased, and global supply growth remains strong — putting pressure on prices. (USDA)
Craig Turner
Office: 312-706-7610
Twitter: @CornWheatSoy
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