U.S. corn stocks report fuels expectations of USDA feed-use cut

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US corn stocks USDA feed-use cut

Highlights

USDA data on September 30 showed over 2 billion bushels of corn in U.S. storage, 35% higher year-on-year and 9% above analyst estimates.
Analysts expect the USDA to reduce its 2025/26 feed and residual use estimate from 6.35 billion bushels after larger-than-expected stocks questioned prior demand assumptions.
A Reuters survey predicts USDA will raise 2025/26 corn stocks guidance for next September by 7% to 1.67 billion bushels, intensifying scrutiny of its demand forecasts.

Corn stocks data drives forecast revision

As reported by Reuters, analysts expect the U.S. Department of Agriculture on Friday to reduce its estimate of how much corn from the 2025/26 crop year was used for feed and residual purposes after quarterly stocks data showed a much larger supply in storage than anticipated.

Farmers and grain handlers held more than 2 billion bushels in storage at the start of last month, up 35% from a year earlier and 9% above analysts' estimates, based on USDA data released on September 30. Economists said the figures suggest USDA had previously overstated feed demand, a key component of corn consumption.

USDA does not directly measure feed use. Instead, it estimates feed and residual demand after accounting for corn supplies that are exported or processed into ethanol, a method that has drawn questions from analysts who challenged the agency's projected 17% increase in feed use before the autumn harvest despite the U.S. cattle herd sitting at a 75-year low.

USDA in July raised its estimate for livestock feed use following a record 2025 corn harvest. Since then, the agency has projected 6.35 billion bushels of corn for feed and residual use in the 2025/26 crop year that ended on August 31, up from 5.49 billion bushels in 2022/23, 5.83 billion in 2023/24 and 5.44 billion in 2024/25.

Higher carryout could deepen data scrutiny

Lower feed use tends to leave more corn in storage, and a Reuters survey of analysts shows USDA is expected to raise its estimate of corn stocks for next September by 7% from last month to 1.67 billion bushels. That would reinforce market doubts about the agency's demand calculations at a time when traders are watching supplies closely.

USDA said it updates feed and residual estimates when stocks and other information become available and that it conducted extensive surveys of farmers and commercial grain storage operators for the quarterly stocks report. The agency added that a forecast requiring revision does not by itself indicate an unusual problem with forecasting or data collection.

The latest debate adds to broader concern over USDA statistics after the agency made record-large revisions to corn acreage estimates last year following deep staff losses. USDA also is seeking to improve crop estimates as farmer response rates to agency surveys have declined over recent decades, though it says surveys remain the best source of grain stocks data.

Our earlier article on rising U.S. Treasury yields highlighted how stress in the government bond market was pushing benchmark borrowing costs toward levels not seen in decades. We noted Pimco’s view that 10-year yields could climb further as leveraged investors unwind positions, with knock-on pressure on mortgage rates, corporate credit, and other rate-sensitive assets.

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