CMSC: New season soy and wheat expected to have a good harvest, global corn demand gap narrowing.

The CMSC released a research report stating that this month's USDA report for the first time disclosed the supply and demand expectations for the global Shenzhen Agricultural Power Group for the 2025/26 year, with the expectation that global corn production may decrease in the new season, while production of coarse grains, soybeans, and wheat may increase. Correspondingly, the global corn supply in the new season is expected to be tight (with the deficit narrowing compared to the previous year), while the supply and demand situation for wheat and soybeans is relatively loose, indicating a positive outlook for international corn prices. In the context of frequent extreme weather events globally, ongoing international trade disputes, and regional and structural imbalances in the supply and demand of the Shenzhen Agricultural Power Group, national food security strategies have reached unprecedented levels. In 2024, China's grain production reached a historic milestone of 1.4 trillion catties, but the country continues to focus relentlessly on food security, optimistic about the prosperity of the planting and seed industry, and a continued focus on the impact of spring drought on food production in 2025. The commercialization of transgenic corn is accelerating, which may drive an expansion in the scale of the seed industry and a reshaping of the landscape, benefiting research and development-oriented leading seed companies. The CMSC's main points are as follows: Corn: Corn in the 25/26 year may set a new record, with the deficit in the new season likely to significantly narrow. This month's report for the first time disclosed the production, demand, and trade expectations for corn in the 2025/26 year. The USDA report this month predicts that global corn production in 2025/26 may set a new record, reaching 12.65 billion metric tons, a decrease of 0.66% compared to the previous year. The largest increases are expected in the United States, Ukraine, and Argentina, partially offsetting the production decreases in Tanzania and Canada. The production increases in Argentina may be due to an increase in planting area, with the country's corn production expected to increase by 3 million metric tons to 53 million tons in the 25/26 year, a 6% increase from the previous year. Ukraine's production is expected to show a recovery growth, with an increase of 3.7 million metric tons to 30.5 million tons, a year-on-year increase of 13.8%. The expansion of corn planting in Brazil also foretells a better production outlook; Brazil's corn production is expected to increase by 0.8% to 131 million metric tons in the 25/26 year. It is expected that global total demand for corn in 2025/26 will be positive, reaching a record of 12.74 billion metric tons, corresponding to a deficit of about 9.45 million metric tons (a deficit for two consecutive years, but the deficit in the new season is likely to significantly narrow). The global corn supply and demand situation is tight, which is favorable for international corn prices. It is expected that the United States will increase corn production in the 25/26 year, and its share of the global export market may decrease. If the new season corn planting area in the United States reaches 95.3 million acres, it will be the highest level in over a decade; and if planting progresses normally and the summer weather is favorable, the corn yield in the new season is expected to reach 181 bushels per acre. Based on the expansion of corn planting area and good yield prospects, it is expected that corn production in the United States in the 25/26 year will reach 15.8 billion bushels, an increase of about 6.4% from the previous year. In terms of consumption, it is expected that fuel ethanol consumption will remain basically the same as the previous year, at about 5.5 billion bushels; due to ample corn supply and possible price decreases, it is expected that feed consumption and residual demand will increase slightly, with total demand for corn in the United States in the 2025/26 year estimated at about 325 million tons (yoy +1.1%), of which feed demand is about 150 million tons (yoy +2.6%). In terms of trade, a downward shift in corn prices is expected to drive global trade growth, with US corn exports in the 2025/26 season expected to increase to 2.7 billion bushels; double increases in production and demand in Brazil may restrain its export growth, and the United States may become the largest corn exporter in the world in the new season, but its global market share may decrease, with the United States' corn ending stocks-to-use ratio estimated at about 11.6% in the 2025/26 year, an increase of about 2.4 percentage points from the previous year. Wheat: The new season's wheat expectations are for abundant production, with supply slightly loose. Global wheat production in the 25/26 year is expected to be abundant, with a slight surplus in supply. It is expected that global wheat production in 2025/26 will reach a record of 809 million metric tons, an increase of about 1.1% from the previous year; increases in production from the European Union, India, the United Kingdom, China, Argentina, Russia, and Canada are expected to offset production decreases in Kazakhstan, Australia, Pakistan, and the United States. It is estimated that global wheat feed consumption in the 25/26 year will be about 155 million tons, an increase of 0.8% compared to the previous year, with feed consumption growth being relatively small due to ample coarse grain supply; it is expected that global total wheat consumption will expand to a record of 808 million tons, an increase of about 4.4 million tons from the previous year, a year-on-year increase of about 0.5%, corresponding to a surplus of about 520,000 tons. In terms of trade, it is expected that global exports in the 2025/26 season will be 213 million tons, an increase of about 6.87 million tons from the previous year; the European Union is expected to have the largest year-on-year increase among major exporting countries, increasing by 7.5 million tons to 34 million tons, a year-on-year increase of 28%; it is expected that Russia will remain the world's largest wheat exporter in the 2025/26 year, with exports of 45 million tons, higher than the 43.5 million tons in the 2024/25 year; exports from Argentina and Ukraine are also expected to increase, while exports from Australia, Kazakhstan, and the United States are expected to decrease. It is estimated that the global wheat stocks-to-use ratio in the 2025/26 year will be about 32.9%, a decrease of about 0.11% from the previous year. Soybeans: Expected abundant production in major producing countries in the new season, with a relatively loose supply and demand situation. In the new season, major producing countries are expected to have abundant production, resulting in a relatively loose global soybean supply. Due to expected increases in soybean production in Brazil, Paraguay, Russia, and China, partially offsetting production decreases in the United States, Canada, Argentina, Ukraine, and Uruguay, it is expected that global soybean production will increase to 427 million tons in the 2025/26 year, an increase of about 1.4%. Brazil's soybean production is expected to reach a record of 175 million tons, an increase of 6 million tons over the previous year; Argentina's soybean production is expected to decrease by 500,000 tons to 48.5 million tons, mainly due to some farmland shifting from soybeans to corn. Global soybean crush volume in the 2025/26 year is expected to increase by 3.5% to 366 million tons, with most of the growth coming from China, the United States, Brazil, Egypt, Pakistan, Argentina, Bangladesh, Thailand, and Vietnam. It is estimated that global soybean exports in the 2025/26 year will increase by 4% from the previous year to reach 180 million tons; the European Union is expected to have the largest year-on-year increase among major exporting countries, increasing by 7.5 million tons to 34 million tons, a year-on-year increase of 28%; Russia is expected to remain the world's largest soybean exporter in the 2025/26 year, with exports of 45 million tons, higher than the 43.5 million tons in the 2024/25 year; exports from Argentina and Ukraine are also expected to increase, while exports from Australia, Kazakhstan, and the United States are expected to decrease. It is estimated that the global soybean stocks-to-use ratio in the 2025/26 year will be about 32.9%, a decrease of about 0.11% from the previous year.8 million tons. The export volume of the main soybean producing countries in South America (Brazil, Argentina, Paraguay, and Uruguay) is expected to increase by 8.5 million tons, far surpassing the decrease in US export volume. Due to increased supply from neighboring countries as well as China, Egypt, Pakistan, Bangladesh, Vietnam, Mexico, and Algeria, Argentina's global import volume is increasing. China's soybean import volume is expected to increase by 4 million tons compared to the revised forecast for the 2024/25 season, reaching 112 million tons. The global soybean end-of-season stocks-to-use ratio for 2024/25 is forecasted at 29.3%, a decrease of approximately 0.7% from the previous year.In the 2025/26 marketing year, demand for soybeans for biodiesel is expected to increase, while global export share may continue to decline Based on a decrease in planting enthusiasm and potential decrease in planting area for soybeans in the new season, it is estimated that the soybean production in the 2025/26 marketing year will be around 1.18 billion metric tons (down 0.6% year-on-year). On the demand side, due to the increased demand for soybeans for biodiesel in the United States, it is expected that the soybean crush volume in the United States in the 2025/26 marketing year will be 24.9 billion bushels, an increase of 70 million bushels compared to the forecast for the 2024/25 marketing year. Although global soybean demand is increasing, the share of the United States in global soybean exports is expected to decrease from 28% last year to 26%. It is estimated that soybean exports in the 2025/26 marketing year will be 1.815 billion bushels, a decrease of 35 million bushels from the previous year. The soybean end-of-year stock-to-use ratio in the 2025/26 marketing year is estimated to be around 6.7%, a decrease of approximately 1.3 percentage points from the previous value. Risk factors: outbreaks of extreme natural disasters/pests affecting crop production; trade frictions, geopolitical conflicts, etc., affecting global trade order; soybean price increases not meeting expectations; commercialization progress of genetically modified crops not meeting expectations.