July WASDE Analysis 07/11/2025

This month’s WASDE report offered a few surprises, particularly in the corn market, but ultimately did little to alter the broader market narrative. With large crops still expected, the supply side of the grain balance sheets remains comfortable. The USDA’s latest figures reinforce our view that the grain markets are firmly in Stage #1 of the "Golden Grain Cycle," where prices are expected to largely chop sideways around production costs, absent a significant weather disruption. While this report offered friendly news for corn, soybeans saw bearish revisions and wheat remains fundamentally heavy. This environment continues to favor range traders while offering opportunities for long-term allocators to build positions.

CORN

This was a fundamentally friendly report for corn, with the USDA surprising the market by lowering both U.S. and global ending stocks more than analysts had anticipated. U.S. 2025/26 ending stocks were pegged at 1.66 billion bushels, a notable 90-million-bushel reduction from the June forecast and well below the average trade guess of 1.72 billion bushels. The cut stems from lower beginning stocks and reduced production forecasts based on the June 30 Acreage report, which more than offset a small reduction in feed use. This tightens the domestic balance sheet, pushing the projected U.S. stocks-to-use ratio down to 10.8% from 11.3% last month. While still an adequate level, this adjustment suggests a less burdensome supply picture than previously thought.

The global picture also offered constructive revisions. World ending stocks for 2025/26 were lowered by 3.2 million metric tons to 272.1 million, also below trade expectations. This decrease was driven by reductions for China and India. The global stocks-to-use ratio now sits at approximately 21.3%, down from 21.6% in June. While not historically tight, this modest tightening on the global balance sheet lends some support to the market and suggests global consumption remains robust.

SOYBEANS

In contrast to corn, the soybean outlook tilted bearish in this report, with the USDA increasing its forecast for U.S. ending stocks. The 2025/26 domestic carryout was raised by 15 million bushels to 310 million bushels, coming in above the average analyst estimate of 303 million. The primary driver was a significant 70-million-bushel cut to the export forecast, which overwhelmed a 50-million-bushel increase in crush. This crush increase is notable, as it is supported by a substantial projected rise in soybean oil use for biofuel, a direct result of proposed EPA rule changes. Despite the robust domestic crush demand, the larger carryout figure pushes the U.S. stocks-to-use ratio up to a more comfortable 7.1%, easing concerns of a tight domestic balance sheet.

Globally, the supply picture remains flush. The USDA raised 2025/26 world ending stocks to 126.1 million metric tons, up 0.8 million from last month. The increase was primarily due to higher beginning stocks and larger inventories projected for Brazil and the United States, which more than offset reductions for China and Argentina. The global soybean stocks-to-use ratio ticked higher to 29.7%. This ample global supply, especially with large Brazilian supplies competing with U.S. exports, will likely continue to pose a headwind for any significant rally in soybean prices.

WHEAT

The July report offered little change to the fundamentally bearish outlook for wheat. While U.S. 2025/26 ending stocks were trimmed by a marginal 8 million bushels to 890 million, this figure remains substantial and only slightly below the trade’s expectation. The minor reduction was due to a 25-million-bushel increase in the export forecast, which was partially offset by a production increase of 8 million bushels on a higher national yield projection. The key takeaway is the U.S. stocks-to-use ratio, which, at 44.3%, remains burdensome. This level of supply is more than adequate to meet demand and is likely to keep a lid on Chicago wheat futures.

The global wheat situation tells a similar story of ample supply, although it did tighten slightly. World ending stocks were lowered by 1.2 million tons to 261.5 million, mainly on reductions for Canada and the EU. This brings the global stocks-to-use ratio to a still-comfortable 32.3%. While global inventories are not projected to be burdensome, they are far from tight. The combination of a heavy domestic balance sheet and an adequate global supply picture suggests the path of least resistance for wheat prices to remain sideways to lower.