Soybeans After January USDA Reports: Supply Is Doing the Talking - 1/12/2026

(Chicago) The January USDA reports reinforced a soybean market that is no longer trading scarcity. NASS held the 2025 U.S. soybean yield steady at 53.0 BPA, while harvested acres edged 100,000 higher to 80.4 million, lifting production 9 million bushels to 4.262 billion. There was no supply-side relief in the data. Instead, USDA confirmed that the crop is large, broadly consistent with trend, and entering a global market already well supplied.

The more consequential adjustment occurred on the demand side. In the January WASDE, USDA raised 2025/26 ending stocks to 350 million bushels, despite increasing crush to 2.57 billion bushels, because exports were cut sharply by 60 million bushels to 1.575 billion. USDA lowered its average farm price assumption by $0.30 to $10.20/bu, signaling that domestic processing strength alone cannot offset weaker export competitiveness. From USDA’s perspective, the balance sheet is loosening because supply surprised higher, and demand failed to keep pace.

The Grain Stocks report helps explain why. As of December 1, total U.S. soybean stocks rose to 3.29 billion bushels, up nearly 190 million bushels year over year, with the increase concentrated off-farm. This pattern suggests beans were moving out of the countryside, but not disappearing. The timing aligns closely with the November rally sparked by expectations of large Chinese buying. Commercials appear to have accumulated physical soybeans in anticipation of export flow that hadn’t so far materialized. Purchases occurred, but not at the scale implied by early market optimism, and critically, no signed agreement or volume framework was ever released. Sales totals appear to be approaching the agreed upon 12.0 MMT, but the USDA still has more than 12 MMT earmarked for China.

As clarity failed to emerge, implied disappearance softened. USDA responded by cutting residual use, trimming exports, and raising carryout projections. Soybeans were owned in the system, but demand did not accelerate fast enough to clear them. With China shifting summer coverage toward Brazil, and Brazil’s 2026 soybean crop raised to a record 178 MMT, USDA is increasingly skeptical that exports can shoulder the adjustment burden.

The Small Grains report quietly reinforces this posture. Wheat and other small grains are not expanding enough to absorb acreage pressure or create feed substitution that would indirectly support soybeans. There is no external tightening force coming from competing crops. As a result, soybeans are left to clear their own surplus through price and demand execution. This is why USDA’s posture has shifted from balance-sheet optimism to balance-sheet realism.

Market structure reflects that tension. The March soybean contract settled near 1049, more than $120 below the November 18 high of 1172-1/2, yet still above the April 9 low near 1014. The market is no longer pricing runaway bullish expectations. From the USDA’s vantage point, soybeans are trading in a zone where supply is ample, demand is uncertain, and rallies require proof. Until exports reassert themselves in a durable way, USDA’s data argue that soybeans are likely to work lower or sideways to clear the surplus.

Today’s USDA reports triggered sharp, fast-moving market reactions. For producers who want real-time visibility into futures and cash markets, FBN TradeDesk provides live quotes and market access throughout the trading day.

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