ARLINGTON, Va., (DTN) -- USDA forecasts farmers will produce a record corn crop in 2025-26 at 15.58 billion bushels (bb) while soybean production will also increase slightly to 4.37 bb despite lower planted soybean acres.

USDA estimates farmers will plant 94 million acres of corn, up 3.4 million acres from 2024-25, while soybean planted acres are forecast at 84 million, down 3.1 million.

USDA released its Grain and Oilseeds Outlook early Thursday, offering USDA's first estimates of the 2025-26 crop year. USDA releases the forecasts as part of its Agricultural Outlook Forum.

CORN

USDA pegs production at 15.585 bb, up 718 million bushels (mb), with a yield estimate of 181 bushels per acre (bpa). If the numbers hold, both production and yield would be records.

USDA sees total domestic use rising as Feed and Residual use increase 125 mb to 5.9 bb. The forecasts does not see any increase in corn use for ethanol, holding it at 5.5 bb, the same as 2024-25. Total domestic use is pegged at 12.785 bb, up 120 mb from 2024-25.

USDA lowered corn export forecasts 50 mb to 2.4 bb.

Ending stocks are expected to be higher for the 2025-26 crop, at 1.965 bb, putting the stocks-to-use ratio at 12.9%. Ending stocks for the 2024-25 crop are pegged at 1.54 bb.

The average corn price will be lower with higher production with USDA forecasting a $4.20 per bushel price, down 15 cents from the 2024-25 marketing year.

SOYBEANS

USDA estimates farmers will plant 84 million acres of soybeans, down 3.1 million acres, but yield would rise to 52.5 bpa, up 1.8 bpa. That puts production at 4.37 bb, up 4 mb from 4.366 bb for 2024-25.

USDA expects domestic crush to increase 65 mb to 2.475 bb. Total domestic use will increase 61 mb overall to 2.585 bb.

Exports are pegged to increase 40 mb to 1.865 bb for the 2025-26 marketing year. That puts total use at 4.45 bb, up 101 mb for the year.

Ending stocks are expected to come in lower in 2025-26 at 320 mb, down 60 mb from 2024-25.

The average cash price is pegged at $10 a bushel, down 10 cents from the 2024-25 crop.

WHEAT

Wheat planted acreage for 2025-26 is pegged at 47 million acres, up 900,000 acres from last year. The average yield is set at 50.1 bpa, down 1.1 bpa from 2024-25.

Total production is pegged at 1.926 bb, down 45 mb from the last marketing year.

Total supply is forecast at 2.83 bb.

Total domestic use is forecast at 1.154 bb, matching 2024-25 usage numbers.

Exports also are held at 850 mb, the same as 2024-25 as well.

Ending stocks, however, will rise to 826 mb, up 32 mb from last year.

The average projected farmgate price is pegged at 5.50 per bushel, down 5 cents from last year.

ANALYSIS FROM USDA, KC FED

In his speech Thursday, USDA Chief Economist Seth Meyer said margins for crop producers will remain tight. The recent bounce in corn prices adds a little more incentive to shift acreage to corn over soybeans. The corn-to-soybean price ratio is about as favorable as it has been in several years, he said.

"The general sentiment is we will see an increase in acres because of this very proposition. Global supplies for corn, or tighter carryout stocks, whereas soybeans are more abundant."

Input prices have remained higher, Meyer noted, and this is going to put more pressure on producers, especially those who cash rent in high-production states. Meyer highlighted some University of Illinois data showing projected gross revenue and production costs outside of land costs. Those numbers simply don't translate into profitability, he said.

"You can't rent. You cannot rent land for that in Illinois. So, if you are renting your land, you are not able to make a profit under those market conditions," Meyer said.

Meyer emphasized some of the increased production in South America for several crops. Cotton production in Brazil, for instance, is rising and that's led to further stagnation of U.S. cotton prices. USDA is forecasting cotton acres will fall 1.1 million to 9.9 million as a result.

On the other side of the ledger from crops, livestock markets are expected to remain stronger partially due to smaller feed prices. Another aspect keeping prices higher not only for beef, but also dairy, is the lack of heifer retention.

USDA has forecast higher net farm income for 2025, but only because of $30 billion in disaster and economic aid that was passed by Congress last December and will help producers. Otherwise, overall net cash income remains flat.

Jeff Schmid, president and CEO of the Kansas City Federal Reserve Bank, also spoke about Fed monetary policies. During questions, Schmid was asked about the outlook for farm loans and distress among producers. Schmid said the overall farm loan portfolio "looks pretty good." Right now farmers are getting approval for their new lines of credit for the crop year.

"This is where we go into the 2025 cycle trying to understand where there are major cracks and so far we're not seeing any major cracks," Schmid said. "As the ag economy has scaled back and shrunk, farm operators have gotten a lot smarter too. So I don't know. Between how they hedge and how they create margin and efficiency, both the banking system and the ag industry seems to have gotten through this cycle of much tighter margins."

Schmid added, "Frankly, the inflation experience in 2022-23 affected farm operators as much as anybody. But it seems like the team of bankers and producers are working through it, based on what we're seeing."

In their talks, Meyer and Schmid also each ignored the elephant in the room. Neither mentioned how their outlooks on the agricultural economy change depending on what happens with tariff disputes. President Donald Trump on Thursday reiterated that 25% tariffs on Canada and Mexico go into effect on March 4 while he also suggested another 10% tariff on Chinese imports.

For a look at the full USDA Grains and Oilseeds Outlook report, go to https://www.usda.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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