USDA Reports Preview          03/06 10:59

   March WASDE May Be Overshadowed by Geopolitical Storm

   It remains to be seen how much fanfare the new World Agricultural Supply and 
Demand Estimates (WASDE) report on Tuesday, March 10, will receive with markets 
rallying on the onset of war in the Middle East.

Rhett Montgomery
DTN Lead Analyst

   On Tuesday, March 10, USDA will touch up its old-crop balance sheets, but it 
remains to be seen how much fanfare the new World Agricultural Supply and 
Demand Estimates (WASDE) report will receive with markets rallying on the onset 
of war in the Middle East and the more pivotal quarterly Grain Stocks and 
Prospective Plantings report due out in just a few weeks.

   USDA will release its WASDE and monthly Crop Production reports at 11 a.m. 
Central Daylight Time on Tuesday.

   CORN

   It took almost two months, but corn futures have finally climbed out of the 
hole left by the bearish January WASDE, with May futures now trading at 
calendar-year highs -- 10-month highs to be exact, if looking at most-active 
futures. Corn traders may be pricing in an anticipated decline in corn area for 
2026, above and beyond what was outlined in the February USDA Ag Outlook Forum. 
However, Tuesday's WASDE will keep the focus with old-crop balance sheets, and 
in that regard, traders may be quick to look ahead to what feels like a much 
more pivotal report at the end of the month when USDA releases the 2026 
Prospective Plantings.

   As for U.S. supply and demand, the Dow Jones survey of 16 firms resulted in 
an average trade estimate of 2.155 billion bushels (bb) of corn ending stocks 
in Tuesday's report. This would be up 28 million bushels (mb) from the February 
WASDE. The export program will again be the most likely candidate for a demand 
increase, with the commitments pace still running 31% ahead of the same point 
in 2025 and USDA, as of the February report, only forecasting a 15% 
year-over-year increase at 3.3 bb. That being said, other demand categories 
such as feed, residual, and ethanol are concerning. But it also may be too 
early for USDA to be comfortable with large adjustments, especially ahead of a 
Grain Stocks report at the end of the month. The Grains Stocks reports serve as 
the cornerstones of USDA balance sheets. In that respect, I would not be 
surprised to see USDA make very minimal changes and keep ending stocks at a 
seven-year high and north of 2.1 bb.

   On the world balance sheet, Tuesday's data will offer the most accurate view 
to date of production in South America, with first-crop corn harvest underway 
in Brazil and Argentina. In terms of Brazil, most of the production comes via 
the safrinha crop in June and July, but first-crop yield reports have been 
good, which may be enough to warrant a revision higher. The Dow Jones survey 
predicts 132.3 million metric tons (mmt), which would be up 1.3 mmt from the 
February forecast. In Argentina, after a very hot and dry January, rainfall was 
much improved in February and may have preserved some yield potential for 
late-planted crops. Harvest is only 7% complete as of this week, according to 
the Buenos Aires Grain Exchange, and USDA is already 4 mmt lower on its 
estimate at 53 mmt. Since harvest is so early, USDA may opt to wait and make 
adjustments in April with more results to inform its decision. Time will tell, 
but the Dow Jones survey agrees with an average estimate of 52.9 mmt.

   SOYBEANS

   The spike in crude oil and diesel futures has been felt directly in the 
soybean oil market, as the May contract has not traded lower since Feb. 20. As 
a result, soybean futures have followed higher, with May futures breaking over 
$12 per bushel, the first time that has happened for the most-active soybean 
contract since early June 2024. The rally is heating up despite some warning 
signs on a fundamental level as we head into the 2026 planting season.

   Regarding soybean demand, export sales have notably slumped to begin 2026, 
as Brazil's harvest is in full swing and carrying a sharp price advantage to 
the U.S. currently. Traders remain optimistic that upcoming meetings between 
U.S. and Chinese officials -- and, of course, the marquee summit between 
Presidents Donald Trump and Xi Jinping -- will result in a prolonged trade 
agreement. For Tuesday, it is unlikely to me that there will be any sweeping 
changes to the U.S. soybean balance sheet, with export commitments running 18% 
behind a year ago and USDA forecasting a 16% decrease. I'd argue that the crush 
program could be revised higher and toward 2.6 bb, especially with the rampant 
rise in oil prices improving margins at the processor level. The average trade 
guess, according to the Dow Jones survey, is for 343 mb of soybean ending 
stocks, down from 350 mb, and a reasonable expectation for what I expect to be 
a neutral report overall.

   In the world market, of course South America will get most of the attention 
on Tuesday. Harvest in Brazil is at a peak currently, and thus far, yield 
reports are very good. The main driver of what will likely be another record 
crop, however, is another expansion in plantings last fall. There are some 
reports of yield variability in the southern growing areas, however, and this 
is likely driving the 179.3-mmt average guess in the Dow Jones survey. That 
would be down 700,000 metric tons (mt) from February but still a record. In 
Argentina, soybean harvest is yet to start, with March being a crucial month 
for pod fill. Until more is known on how crop development finishes, I expect 
USDA to be conservative and near February's estimate of 48.5 mmt. For the world 
as a whole, analysts expect soybean stocks to hold near 125 mmt.

   WHEAT

   As is the case with corn and soybeans, wheat futures have accelerated their 
rally through this week, breaking above $6 on Kansas City futures for the first 
time since early 2025. Again, however, most of the bullish fundamental talking 
points are to do with widespread drought across U.S. winter wheat areas and 
mixed conditions heading into the spring green up. And for the time being, 
old-crop fundamentals will likely remain on the bearish end of the spectrum. As 
a result, I question the market-moving potential of Tuesday's report, as the 
current rally does not seem heavily rooted in wheat supply and demand ideas.

   On the U.S. balance sheet, analysts are expecting a moderate decline in 
wheat stocks to 923 mb, from 931 mb in the February report. There may still be 
some room in exports, but that bullish argument has faded quickly through the 
past two months, as world competition has increased, and U.S. commitment pace 
has dwindled to a 14% year-over-year lead. USDA is still forecasting a 9% 
year-over-year increase in wheat exports. I expect USDA will be minimal in its 
alterations for this report, with the March 1 Grain Stocks report due out at 
the end of the month.

   As for world wheat, the old-crop balance sheet is unlikely to feature many 
drastic changes, with no major crops being harvested. And even so, USDA will 
not release a new-crop 2026-27 balance sheet until the May WASDE. If the world 
stocks estimate in the Dow Jones survey of 277.3 mmt (277.5 mmt in February) 
proves accurate, that will still be the largest world wheat inventory in five 
years. It will be interesting to see how traders react to this fundamental 
reminder given the drastic risk-on rally through February and early March.

   **

   Join us for DTN's post-report webinar at 12:30 p.m. CDT on Tuesday, March 
10, as we discuss USDA's new estimates considering recent market events. 
Questions are welcome, and registrants will receive a replay link for viewing 
at their convenience. Register here for Tuesday's USDA March WASDE webinar: 
https://www.dtn.com/wasde-webinars.

U.S. ENDING STOCKS (Million Bushels) 2025-26
                  Mar    Avg       High      Low       Feb       2024-25
Corn                     2,155     2,428     2,077     2,127     1,551
Soybeans                 343       350       265       350       325
Wheat                    923       956       900       931       855
WORLD ENDING STOCKS (million metric tons) 2025-26
                  Mar    Avg       High      Low       Feb       2024-25
Corn                     289.3     290.2     287.1     289.0     294.4
Soybeans                 125.0     126.0     123.3     125.5     123.7
Wheat                    277.3     278.0     276.0     277.5     259.8
WORLD PRODUCTION (million metric tons) 2025-26
                  Mar    Avg       High      Low       Feb       2024-25
CORN
Argentina                52.9      54.0      51.5      53.0      50.0
Brazil                   132.3     136.0     130.0     131.0     136.0
SOYBEANS
Argentina                48.1      49.0      47.0      48.5      51.1
Brazil                   179.3     181.0     177.8     180.0     171.5

   Rhett Montgomery can be reached at rhett.montgomery@dtn.com

   Follow him on social platform X @R_D_Montgomery




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