There Were No Big Surprises in the USDA’s Ag Outlook Forum Forecasts. So Why Are Grains Futures Prices Falling?

The USDA’s Annual Ag Outlook Forum began Thursday morning with U.S. planted acreage and supply and demand forecasts for U.S. crops and livestock. Individual forum sessions on Friday will offer additional insight and analysis into Thursday’s forecasts. Here are Thursday’s highlights.

USDA Forecasts for Corn, Soybeans, Wheat, and More

U.S. Corn (ZCH25): Planted area of 94 million acres, which is slightly above market expectations. Harvested area of 86.1 million acres and a national average yield of 181 bushels per acre. That makes a crop of 15.585 billion bushels this year. U.S. corn exports are forecast at 2.4 billion bushels, making U.S. carryover rise to 1.965 billion bushels and setting a season average farm price at $4.20 a bushel.

U.S. Soybeans (ZSH25): Planted acres will decline to 84 million acres, which is slightly below market expectations. Harvested area is at 83.2 million with a national average yield of 52.5 bushels per acre. That would result in a soybean crop of 4.770 billion bushels. Crush would rise to 2.475 billion bushels, with exports rising to 1.865 billion bushels, putting U.S. carryover at 320 million and a season average farm price of $10.00 a bushel. 

U.S. Wheat (MWK25): All wheat planted acres are forecast at 47 million acres, very close to market expectations. Harvested acres are at 38.4 million with a national average yield of 50.1 bushels per acre. That would bring a crop of 1.926 billion bushels. U.S. carryover is seen rising to 826 million bushels and the season average farm price at $5.50.

U.S. Cotton (KGK25): Planted acres are forecast at 10 million, in line with market expectations. Harvested area is at 8.41 million and a 15.9% abandonment rate. Average cotton yield is seen at 833 pounds per acre, producing a crop of 14.6 million bales. Exports are seen rising to 13.0 million bales, with domestic use of 1.7 million bales for carryover at 4.8 million bales. A season average farm price is seen at $0.65 a pound. 

U.S. Cattle/Beef (LEJ25) (GFH25): Beef production for 2025 is seen at 26.6 billion pounds, down nearly 2%, as “tighter domestic feeder supplies are expected to constrain feedlot placements.” Beef exports are seen down 7% while imports are expected to hit 5.77 billion pounds, a 3% rise. The 5-area steer price is forecast to average $291.00 per hundredweight.

U.S. Hogs/Pork (HEJ25) (KMJ25): U.S. production is forecast at 28.5 billion pounds, up 3% from 2024, with pork exports seen at 7.30 billion pounds, up 3% as “increased domestic production and continued strong international demand for pork is expected to support U.S. exports.” Pork imports are seen at 1.17 billion pounds, up 2%. National base 51%-52% lean hog prices, live equivalent, are seen at $65.00 per hundredweight, a 3% rise from 2024. “Despite increased availability of hogs, prices will be supported by strong demand, both domestically and internationally, and higher beef prices.” 

Grain, Livestock Traders’ Focus Quickly Returns to U.S. Tariff Threats

Grain and livestock traders quickly digested the Ag Outlook Forum forecasts, especially since there were no big surprises, and are keyed in on new U.S. tariff threats from President Donald Trump’s administration. Trump Thursday said tariffs on Canada and Mexico will take effect in early March. Trump added he intends to double the 10% tariff currently levied against Chinese imports. 

Grain futures prices were sharply lower Thursday morning in anticipation of new tariffs prompting retaliatory actions from the targeted countries that may include sanctions on U.S. agricultural products. The solid rally in the U.S. dollar index ($DXY) following Trump’s latest remarks, as well as some stronger-than-expected U.S. economic data released Thursday morning, are adding to the selling pressure in the grain markets Thursday.

Importantly, price action in the corn, soybean and wheat markets over the past week has produced significant chart damage to suggest near-term market tops are in place. The keen uncertainty regarding new U.S. tariffs and potentially other trade sanctions has the grain market bulls running for cover. It’s now likely grain futures prices will grind sideways or fall in the coming weeks, at least until the U.S. planting season gets under way and the weather comes more into play during the growing season for corn, soybeans and wheat.