Traders across the spectrum braced for a flood to start the year as government agencies cranked back to life in January, with most publishing data again after shutting down in October. Instead, markets ranging from stocks to bonds and even the beleaguered dollar stretched for a collective yawn. Prices held ranges despite myriad other flashpoints from the Federal Reserve to Venezuela, Iran and beyond.
Corn and soybeans, however, didn’t get the memo.
Bearish Jan. 12 USDA reports on 2026 production and demand sent futures down sharply on Monday.
- Corn led the way, losing nearly 5.5% while falling to its lowest point since October.
- Soybeans fared better but still succumbed to a double-digit decline.
- Cash prices for both crops fell some 15% below the full cost of production.
USDA dealt corn a double whammy. The agency found more 2025 crop leftover Sept. 1, then raised its estimate of 2026 production to a record 17 billion bushels.
Despite the bearish production and demand numbers, USDA actually increased its average price forecast for corn by a dime to $4.10. My model suggests potential for the benchmark to slip below $4, perhaps all the way down to the $3.35 to $3.70 level, putting lows from the past two years into play.
For soybeans, the question was not what USDA did but what the agency failed to do. Rather than cut South American production due to dry conditions associated with the La Nina cooling of the equatorial Pacific, the government raised its estimate of Brazil’s harvest, cutting into the U.S. share of global export business and increasing stocks around the world. That knocked 30 cents off the average cash price forecast for the crop, which slipped to $10.20, close to the current value in Central Illinois.
Corn market turns to 2026 crop expectations
The series of reports put out in January can provide a turning point for the market. But rallies are far from guaranteed, with bids scooped up by farmers needing to price old crop inventory.
Soybeans still could respond to Chinese buying but really big deals look like a Hail Mary at this point.
With plenty of corn around, look for that market to increasingly focus on 2026 acreage and production.
- The ratio of soybean to corn futures for fall 2026 delivery isn’t providing much impetus. It settled near 2.36 to 1 after the reports, right around its long-term average, so neither crop has much advantage.
- Corn should find at least a little support from the idea that farmers will plant less this spring, switching fields to soybeans to save on production costs.
Ahead of USDA’s Prospective Plantings report, due March 31, watch out for the agency’s Agricultural Outlook Forum Feb. 20-21, when early forecasts made the previous fall are normally updated.
Financial markets also could provide momentum, with the next big inflection point due Jan. 27, when the Federal Reserve updates monetary policy. With employment mostly steady, no change in short-term rates is expected. That outlook likely won’t change when the inflation rate for December is released today. However, shooting wars could roil markets far and wide if one breaks out.
Sluggish seasonals
Without help from headlines, both corn and soybeans tend to spin their wheels during the winter.
- Corn trades sideways in years following a normal harvest, with a brief bounce in early March usually fading well before the acreage update.
- Soybeans on average grind lower, weighed down by the arrival of new crop production from South America