The May 12 USDA Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports seemed to be all about wheat, with the first in-field assessment of the U.S. wheat crop. While there were some changes for the U.S. corn and soybean balance sheets, they were more minor, with corn a bit bearish and soybeans neutral.

Let's look at each commodity:

CORN

With only minor changes expected on the domestic corn balance sheet, USDA did not disappoint. Corn acres were pegged at 95.3 million acres (ma) -- down 3.5 ma from a year ago and 87.4 ma harvested acres and pretty much as expected. Using a 183-bushel-per-acre (bpa) trend yield, the crop was estimated at 15.995 billion bushels (bb) for 2026-27. Feed and residual were reduced by 100 million bushels (mb) to 6.1 bb, and exports were estimated to be down 150 mb to 3.150 bb. That led USDA to an ending stocks number of 1.957 bb. In the old-crop slot (2025-26), USDA had ending stocks up 15 mb to 2.142 bb as a result of a decline in corn for food use. Some analysts and traders feel that the old-crop ending stocks number could move higher, as feed and exports may be overstated.

On the world side, USDA raised Argentine corn production by 7 million metric tons (mmt) to 59 mmt (2.32 bb) and raised Brazilian corn by 3 mmt to 135 mmt (5.3 bb). Argentine corn exports are forecast to be record large at 43 mmt (1.7 bb). USDA has China importing 6 mmt of corn in both 2025-26 and the same in 2026-27. World ending stocks of corn are projected to fall 19.5 mmt to 277.5 mmt (10.9 bb), primarily due to much lower stocks in China.

The report was neutral on corn, but it was more reactive to the soaring wheat market, strength in crude oil and the ongoing war. July closed up 4 3/4 cents at $4.80, with new-crop December finishing up 4 1/4 cents at $5.02.

SOYBEANS

For soybeans, acreage was pegged at 83.7 ma. Using a 53-bpa yield, production would be 4.435 bb compared to 4.262 bb a year ago. Ending stocks in the 2025-26 season fell by 10 mb to 340 mb due to a drop of 10 mb in exports and an increase of 20 mb in crush. On the new-crop side, ending stocks were pegged at 310 mb, as crush was raised to a record 2.750 bb, and exports increased to 1.630 bb. Crush was up 120 mb from last year, as three new biofuel plants will come online. Soybean oil used for biofuel increased from 14.2 million pounds to 17.8 million pounds, with the season average price raised by 7 cents to 70 cents.

On the world side, there were minor changes. Brazil soy production was raised to 180.4 mmt (6.63 bb), and Argentine soy was raised to 48.5 mmt (1.78 bb). China soybean imports were raised 2 mmt to 114 mmt (4.19 bb) for the coming year. Ending soybean stocks fell just 1% from 2025-26 to 124.78 mmt (4.58 bb).

The soybean report was basically neutral and seemed to go right back to trading on hope ahead of the Thursday start to the U.S.-China summit in Beijing. Soybeans and products rose on Tuesday, reflecting optimism that a trade deal could be worked out with China. July soybeans finished up 13 3/4 cents to close at $12/26 3/4, with November up 10 1/2 cents at $12.05.

WHEAT

Wheat was where the excitement was for the May WASDE and USDA Crop Production reports. For the 2025-26 crop year, ending stocks were pegged at 935 mb on slightly lower food and seed use. The wheat production report had some big surprises following the months-long drought and frost events that compromised winter wheat yield and production. A cut in production was surely expected, based on the dismal crop ratings and having 70% of the crop affected by some form of drought. But no one expected the kind of drastic reductions that we got in the May report. All-wheat production was forecast to be 1.561 bb -- 424 million bushels lower than last year. Hard red winter wheat, at just 515 mb, was 118 mb below the average trade guess and 290 mb under last year. Even soft red wheat was 33 mb below the average guess and 52 mb lower than a year ago. The crop yield fell from 53.3 bpa a year ago to 47.5 bpa now. And perhaps the biggest surprise was the fall in harvested acres to just 32.9 ma compared to 37.2 ma last year. The abandonment rose to 32% from 25% the prior year, with abandonment rates in Texas and Oklahoma huge. Due to the smaller crop, USDA lowered exports by 135 mb to 775 mb from the revised 910 mb in the 2025-26 year, and feed and residual was also lowered. Ending stocks were forecast to fall to 762 mb from 935 mb this year.

As if the bullish domestic changes weren't enough, global wheat production was slated to fall to 819.1 mmt (30.1 bb) compared to 843.8 mb (31.07 bb) last year, with not only the U.S. reduction, but also lower production in the EU, Argentina and Australia. Global wheat trade was also lowered by 12 mmt (441 mb), as reduced import demand from North Africa and the Middle East are expected. World ending stocks of wheat fell 4 mmt in the 2025-26 crop year and are expected to decline another 4.2 mmt to 275 mmt (10.1 bb) for 2026-27 as countries shift production from wheat to oilseeds.

Both Kansas City and Chicago July wheat finished up the daily limit at 45 cents higher, while MIAX Minneapolis ended 37 1/2 cents higher.

FINAL THOUGHTS

The May 2026 WASDE and USDA reports were surprisingly bullish wheat, and funds, who already came into the report net long, likely added to that position. While wheat closed up the limit, it will certainly stifle U.S. export sales. Prior to the report, U.S. hard winter wheat was already a $1.40-per-bushel or more premium to the competition in the EU and Black Sea.

Dana Mantini can be reached at dana.mantini@dtn.com

Follow Dana Mantini on Twitter @Mantini_r

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