U.S. corn futures recoup slice of Friday's steep drop after USDA forecast larger crop

U.S. corn futures edged higher Monday after the previous session's sharp decline in reaction to a surprise report from the U.S. Department of Agriculture that forecast higher corn production and yields when most analysts expected a cut.

Friday's WASDE report raised its 2026-27 corn production estimate by 234M bushels to 16B bushels, up 1% from a month earlier, and boosted its forecast national average corn yields by 2.7B bushels per acre to 181.2B, which came in above estimates for 177.8 bushels per acre.

"The sharp corn yield increase caught the market wrong-footed," which prompted heavy liquidation pressure, Brian Grete of Commstock Investments said in a Friday note. "The bearish USDA surprise has changed the money flow game."

The previous week's Commitments of Traders report from the CFTC showed a net long fund position of 377,850 contracts, which was down slightly from highs seen earlier this year.

U.S. corn futures halted losses in Monday's trading, with the market "largely seeing a reversal from Friday's post-WASDE trade, with a multitude of corn tenders announced after the break lower in prices," StoneX analyst Matt Zeller said in a note.

The USDA also raised its 2026-27 U.S. wheat supply forecast by 8M bushels, citing higher imports and production, and estimated production at 1.534B bushels, slightly above its previous estimate, as higher yields more than offset reduced harvested area.

Despite the increase, U.S. wheat production is projected to come in at the lowest since 1970.

CBOT wheat futures also rose on expectations of further global supply chain difficulties after Russia continued to strike Ukraine's energy infrastructure after President Trump had said both sides would stop energy attacks.

CBOT corn for December delivery (C_1:COM) rose 0.8% to $4.83 1/2 per bushel on Monday after plunging 4% on Friday, while wheat for December delivery (W_1:COM) added 0.3% to $6.72 3/4 per bushel, and soybeans for November delivery (S_1:COM) fell 0.3% to $12.88 1/4 per bushel.