Lang
The outlook for grains and oilseeds in 2026-27 looks largely lacklustre, with one notable exception.
Bryn Swearingen, agricultural economist at the US Department of Agriculture's Economic Research Service, said demand for US soybean oil is expected to be voracious.
She told delegates at the USDA's 102nd annual Agricultural Outlook Forum that the US biofuel sector is expected to buy 17.3 billion pounds of soybean oil, an increase of 2.5 billion pounds on 2025-26.
That would absorb more than the anticipated 1.39 billion pound rise in soybean oil production in 2026-27.
Swearingen's biofuel use forecast is based on the favourable Renewable Volume Obligations (RVOs) announced by the US Environmental Protection Agency (EPA) in its proposed rule issued in June 2025.
The EPA's final rule is expected any day.
The forecast also rests on the 45Z producer tax credit, which favours North American feedstocks and penalises foreign ones.
The sheer volume of soybean oil flowing into the US biofuel market will reduce the quantities available for food, feed and export by about 800 million pounds.
Ending stocks are expected to fall by 170 million pounds in 2026-27, lifting the average soybean oil price to $0.58 per pound, a 9.4% improvement on 2025-26.
This is good news for canola growers in Canada, since canola prices are closely tied to US soybean oil prices.
Why it matters: Soybean oil was the sole bright spot in Swearingen's forecast.
The rest of her grains and oilseeds outlook was ordinary and uneventful.
Stocks held by major exporters of corn, wheat and soybeans are expected to rise in 2025-26, capping price expectations for 2026-27.
"Given all these ample supplies, we expect prices to see only a marginal recovery in 2026-27," Swearingen said.
The USDA expects the average cash price for soybeans, corn and wheat each to rise by $0.10 per bushel in 2026-27.
Soybeans would average $10.30 per bushel, corn $5.00 and wheat $4.20.
US corn planted area is expected to fall to 94 million acres, against 98.8 million acres last year.
Production is also expected to drop by 1.27 billion bushels because of the smaller planted area and a return to trend yield levels.
Corn ethanol use will hold steady, while feed use falls by 200 million bushels and exports by a further 200 million bushels on lower supplies and intense international competition.
Ending stocks will decline by 290 million bushels but remain high by historical standards.
Soybean planted area, by contrast, is expected to recover to 85 million acres, up from 81.2 million acres last year.
Yields are expected to match last year's, but production will rise by 188 million bushels thanks to the larger planted area.
Domestic crush will increase by 85 million bushels, consuming close to 60% of total US production in 2026-27.
Exports are expected to rise by 125 million bushels in 2026-27 as China returns to the market.
Soybean ending stocks are expected to remain similar to the current crop year, with the increase in production offset by growth in crush and exports.
Wheat planted area will be essentially flat at 45 million acres, against 45.3 million acres last year.
Yields are expected to fall by 2.5 bushels per acre, cutting production by 125 million bushels.
Total supply is expected to fall by 48 million bushels, with higher beginning stocks partly offsetting the production decline.
Exports are expected to fall by 50 million bushels, while ending stocks stay flat, keeping prices subdued.
Swearingen noted that factors that could change her grains and oilseeds forecast include the EPA's final RVOs, weather conditions, trade agreements and any major surprises in the Prospective Plantings report due on 31 March.
Source: The Western Producer