Gulke: Beware of February’s Info

If the media were data-starved in the last important months of 2025, they are going to be plagued, perhaps, with data overload this month.

I am sure you will recall the top in prices for 2025 came last year on about Feb. 21 for reasons covered in detail in previous columns. It came as a surprise to most who expected conventional wisdom to repeat and see highs normally found by mid-May. This year, everyone seems to be touting a repeat of last year, looking forward to highs in two weeks again. By now, most should realize that no two years are alike, especially ones influenced by eco-political events running amok. So where would there be surprises?

First of all, we have a new chief economist at USDA. Dr. Justin Benavidez was appointed to replace Seth Meyer. While his age is not listed, his graduation from Texas A&M indicates he may be in his early 30s. Benavidez studied forecasting and simulation applied to the intersection of agricultural policy and decision-making in the areas of farm management and crop and livestock production. His master’s thesis was entitled “The CRP Choice” and focused on helping producers decide whether or not to enroll their land in the Conservation Reserve Program or an alternative use. So, we have new leadership in that sector as well as other sectors — likely replacing 20,000 employees who left the USDA, according to the Inspector General’s Office.

Given the government shutdown last fall and the need for months to get caught up with information, there may or may not have been enough time to ascertain an outlook ahead of the upcoming USDA Farm Forum, especially as it is scheduled a week earlier than last year. This puts the odds at about 50-50 for some sort of surprise later this month.

In addition, last year, we warned of a top in the markets post-Feb. 21, 2025, due to some inconsistencies in outlooks. The Feb. 25, 2025, DTN column cited the following regarding what to expect in the 2025 USDA Forum based on a previously released USDA Agency report, to wit:

“What can we expect from the USDA Ag Outlook Forum? The answer may lie in past data and protocol in preparing that information. The Ag Forum isn’t the first look at the future by USDA. There is a report put out in the middle of February each year by the Interagency Projections Committee, consisting of the World Outlook Board, ERS, FSA, Chief Economist, OMB and RMA, along with some others of lesser importance. The consensus analysis reflects a composite of model results and judgment-based analysis.”

Keywords then — and perhaps now — are bold in the last sentence above.

It is important to note that the report from the Interagency Projections Committee will come out, I believe, a day ahead of the USDA Forum. Being aware of the release of such information is critical timing. It is just a hunch, but considering the lack of personnel replacements, perhaps the agency and USDA Forum Outlook compilation will be one of mutual effort that makes the USDA Forum all the more important and fraught with unexpected data.

WHAT TO EXPECT?

There is a surplus of corn stocks ending this year and a need for more soy acres, based on the tight USDA baseline estimates of only a 337-million-bushel (mb) carryout for 2026-27, even with a 3.5-million-acre estimated increase in soybean acres. The drop in all-wheat acres of 1.2 million or more, based on our estimate, will likely go to soybeans. However, the love affair for a 95% insurance coverage in corn makes it more attractive, especially when considering the bridge payments for corn are higher than for soybeans. 

USDA will have a decision to make on good corn demand that looks like it will continue well into the harvest of safrina corn in South America, making NOT further increase the exports for corn difficult. It is reported that Brazil’s appetite for ethanol is accelerating, which puts another wrinkle in the outlook projections. According to Reuters News, INPASA (a grain bio-refinery in Brazil) said it will make Brazil’s first export of DDGs to China next week.

The media was insistent on believing China would not honor the 12 million metric ton (mmt) soybean purchase commitment. Now that this is behind them, when do they think the next 25 mmt demand will come? Perhaps next fall, when our prices are the lowest? If soybean acres were to rise by chance only 1 million to 2 million by the March 31 planting intentions report, the expectations by the masses that we will repeat the high again on Feb. 21 will need an attitude adjustment.

UPDATE: A more detailed outline of the India agreement was released Tuesday, which wasn’t all that friendly to grains/oilseeds and gives pause to what other yet-incomplete trade deal frameworks will reveal. Further details of the 45Z were also released. Analyzing details of the 172-page report will take some time during the extended comment period. 

Jerry Gulke can be reached at (707) 365-0601 or by email at Jerry@gulkegroup.com