Full Bins, Flat Prices: Margin Pressure Builds Despite Corn Record
Corn, Wheat, and Soybeans in the Bins
The 2026 ag outlook signals a correction, not a collapse, as producers and brokers recalibrate around new realities.
We head into 2026 with bins full, prices soft, rates drifting down (but not cheap), and cattle still staying afloat. USDA’s most recent published WASDE has 2025 production at 16.8 billion bushels corn, 4.3 billion bushels soybeans, and 1.98 billion bushels of wheat. This translates to higher corn production compared to recent years (~10% above the last two years), but reduced soybean and wheat production. Season‑average farm prices will likely be around $3.90 corn, $10.00 beans, and $5.10 wheat. That combo implies margins stay tight unless area-level basics or yields offer assistance.
There remains an underlying market force that is currently underweighted: storage and logistics will drive revenue as much as, if not more than board prices. Storage capacity hasn’t kept up with crops over the last decade, and shutdown-delayed data (no October WASDE) adds uncertainty. Together, this implies wider, more volatile basis as commercials fight for space. An important implication of this is that cash marketing management will affect bottom lines as importantly as clever forward or futures marketing. USDA Economic Assistance Payments via the Emergency Commodity Assistance Program may help, but the government shut down has postponed them for now.
Trade is another factor adding headaches. China has stepped back from U.S. soy; USDA/AFBF see U.S. ag exports to China sliding in 2025 and likely again in 2026. One bright spot for U.S. corn growers is that the USMCA panel forced Mexico to roll back restrictions on U.S. GE corn for human consumption earlier this year; this is important given how much U.S. corn flows south to Mexico. Wheat faces continued competition from Russia/Canada/Argentina, keeping U.S. export bids competitive.
Interest Rates – Modest Help on the Horizon?
The Fed’s September dots point to a funds rate around 3.6% at end‑2025 and 3.4% at end‑2026. That is good news for borrowers, but because farmers borrow at a blend of both long-term and short-term rates, costs will not drop 1:1 and they’re still well above the 20‑year average. The Kansas City Federal Reserve shows rates about 0.50% lower than last year yet still about 1.25% above long‑run norms. Expect modest relief on operating and real‑estate notes, but not a windfall. As has often been the case, cash will remain king.
Crop Ground is Cooling, Ranch Ground Stays Firm
Nationally, cropland values rose 4.7% in 2025 to $5,830/acre; pasture up 4.9% to $1,920. Looking a bit deeper, increases have cooled in the cornbelt, while ranchland held firmer. Cash rents were mostly flat. Capitalization rates haven’t normalized because borrowing costs remain high relative to recent decades, and it is hard to make a 3-4% cap rate work when borrowing costs remain between 5-7% on long-term debt.
There are Two Angles to Watch Going into Winter
Crush economics have shifted – USDA expects over half of U.S. soybean oil to go into biofuels in 2025/26. That tilts soybean value toward oil and could keep cash bids stronger near processors even if exports in meal remain depressed. This means basis may strengthen to the upside around crushing facilities. Longer term, renewable diesel’s staying power remains uncertain and will hinge on policy, trade, logistics, and actual project execution.
Cheap corn helps feeders – Lower corn futures and ample 2025 production helps cattle feeders on their primary input cost, while tight cattle supplies keep cattle prices historically strong into 2026.
Summary
2026 is about cash discipline and local economics, especially for row crop producers; but for the first time ever, most players in the cattle chain are making money. This marketing year it is important to manage basis as you do your crop. Treat storage, freight, shutdown, and timing as the potential for locking in relative gains and assume policy and trade noise will keep board and basis volatile and unlikely to produce substantial windfalls.
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Disclaimer: Please note that the information provided in this article is for educational and informational purposes only, and should not be construed as financial or investment advice. While we have made every effort to ensure the accuracy and reliability of the information presented, Conterra Ag Capital and its affiliates make no representation or warranty as to the completeness, correctness, timeliness, suitability, or validity of any information contained in this article. You should always consult a qualified financial advisor, tax professional, or other qualified professional for advice on your specific financial situation.
