The January Report Shocker

The latest USDA report, released on January 12, 2026, has sent shockwaves through the commodity markets. What many expected to be a routine winter update turned into a "devastating" reality for producers, resetting the outlook for 2025 and 2026 hedges.

The Numbers: A Historical Deviation

The report blindsided the industry with record-breaking data that defied nearly all pre-report expectations.

• Corn Production & Yield: USDA confirmed a record 17.021 billion bushel corn crop for 2025.

• Surprise Yield Hike: While traders expected a 2- to 3-bushel cut, the USDA instead added a half-bushel, bringing the average yield to a record 186.5 bushels per acre.

• Acreage Explosion: Harvested corn acres were revised upward by 1.211 million acres since the June estimates. This represents a jump in acreage collection that hosts Jon Prischmann and Ryan Tungseth noted has "never happened in history" past mid-summer.

• Market Reaction: Corn futures plummeted 24.5 cents, breaking out of a long-standing range and ending the day at a low.

Why This Hurts

This report is particularly damaging because of its timing and the current economic environment for farmers.

• Terrible Timing: Coming just before the spring planting season, the report evaporates much of the hope for a bullish marketing window.

• High Input Costs: With input costs remaining high, these lower prices put many producers well below the cost of production.

• Widespread Bearishness: It wasn't just corn; wheat and soybeans also faced grim numbers. Soybean yields hit a record 53 bushels per acre, and despite low acreage, ending stocks were raised to 350 million bushels.

Is There a Glimmer of Hope?

Despite the "total destruction" of bullish sentiment, the Hedge Heads team identified a few potential, albeit slight, silver linings:

• The Spread Signal: The March/May spread barely moved, suggesting that there might not be as much physical corn immediately available as the report implies.

• Global Competitiveness: U.S. corn is now the cheapest in the world, which could continue to fuel phenomenal export demand.

• Weather Wildcards: While it's a long shot, a weather scare in South America or planting delays in the U.S. remain the only major catalysts that could bail out old crop prices.

What Can You Do Now?

The $5.00 new crop corn put that many were hoping for is likely gone for now. Moving forward, producers should:

1. Watch the Basis and Spreads: These will be the true indicators of whether the USDA's massive supply numbers are accurate.

2. Look for Cheap "Re-ownership": As volatility remains low, very cheap call options for late 2026 or even 2027 may become an attractive way to maintain upside exposure without the risk of holding physical grain.

3. Prepare for Hard Conversations: With margins tightening, expect creative and difficult discussions with lenders heading into the new season.

"It's always darkest before the dawn, but this report just took all chances away for even low-risk hedging right now. You're on your heels and hoping for something to happen." — Jon Prischmann.

Contact Jon Prischmann: 218-731-1578

Remember, trading commodity interests involves substantial risk of loss. These are opinions only and not trading advice.