USDA Cuts Corn Stocks; Exports Fuel Rally Now 2026

USDA Cuts Corn Stocks; Exports Fuel Rally Now 2026

Last week’s key developments in the corn complex centered on the USDA’s December WASDE update and a sharp pickup in futures trading activity. The USDA raised export projections while trimming ending stocks, a combination that tightened the supply picture and helped lift year-end futures prices. Meanwhile, elevated trading volume and rising open interest signaled that market participants are positioning for a sustained response to the revised fundamentals.

WASDE revision tightens U.S. supplies

The USDA’s December World Agricultural Supply and Demand Estimates notably raised U.S. corn export forecasts by 125 million bushels to 3.2 billion bushels, and lowered U.S. ending stocks by a similar amount to roughly 2.029 billion bushels. That reduction pushes the stocks-to-use ratio down to around 12.5% from the prior month’s estimate, a meaningful tightening for a market that had been working off large carryover supplies.

Key numbers and why they matter

• U.S. exports: revised up by 125 million bushels to 3.2 billion — stronger-than-expected demand.
• U.S. ending stocks: trimmed to ~2.029 billion bushels — lower buffer for unexpected supply shocks.
• Stocks-to-use: moved closer to 12.5% — historically lower ratios tend to support price floors.

From an investor’s standpoint, the simultaneous upward revision to exports and downward revision to stocks is a clean bullish signal: demand is eating into supplies faster than previously projected. Because USDA WASDE figures influence risk assessments used by exporters, processors, and funds, the December report had an immediate impact on positioning.

Futures activity shows growing conviction

Futures markets reacted not only in price but in participation. Late-December sessions saw sharp increases in both trading volume and open interest — two technical indicators that reflect trader engagement and the buildup of new positions.

Volume, open interest and price behavior

• December 29: CBOT corn futures traded about 234,037 contracts, with open interest rising roughly 5,900 contracts to about 1.517 million.
• December 30: volume remained elevated at ~177,734 contracts and open interest climbed further to ~1.523 million contracts.
• Late-December prices: futures averaged roughly $444–$450 per bushel range in week-to-week comparisons, showing a steady gain into year end.

Rising open interest alongside higher volume typically indicates new money flowing into a trend rather than short-covering only. For corn, that suggests participants are not merely reacting intraday but are re-shaping exposures based on the tighter supply/demand outlook from USDA.

Price action and near-term outlook

Price momentum at the end of the year reflected the fundamentals: a rebound from mid-December averages into late-December highs. With the USDA trimming stocks and exports proving more resilient, near-term support for corn has strengthened. Technical attention will focus on resistance levels near the mid-$4.60 area in futures, while nearby support is anchored by the revised stocks/use data.

Practical implications for stakeholders:

• Producers: consider forward-selling strategies for portions of anticipated 2026 production while monitoring basis moves tied to local demand.
• Merchants and exporters: the larger export projection implies continued loadings into early 2026—plan logistics and hedges accordingly.
• Traders/spec funds: elevated open interest suggests liquidity for position changes, but also the potential for sharper moves if supplies or demand unexpectedly shift.

Conclusion

The December WASDE’s export upgrade and stock reduction combined with late-December futures activity changed the tone for corn heading into 2026. Tightened U.S. supplies and higher export expectations are supporting prices, and the uptick in volume and open interest shows the market is taking those signals seriously. For investors and industry participants, the immediate focus should remain on exported demand flows, shipment confirmations, and any supply-side surprises that could further alter the balance.

Data-driven positioning and disciplined risk management will be key as the market digests these shifts into the new year.