Corn Rallies on Wednesday, Helped by Record Ethanol Output

Corn futures closed higher by 3-5 cents across front months, primarily driven by a record ethanol grind which saw production reach 1.123 million barrels per day, contributing to increased ethanol stocks. Despite the ongoing government shutdown delaying official export sales data, analysts estimate robust U.S. corn exports of 0.8-2 million metric tons for the week ending October 30th.

Analysis

Corn futures closed higher on Wednesday, with front-month contracts gaining 3 to 5 cents, primarily driven by a record ethanol grind. The CmdtyView national average Cash Corn price also rose 3 ½ cents to $3.96, reflecting positive market sentiment.

EIA data confirmed a record ethanol production of 1.123 million barrels per day, an increase of 32,000 bpd from the prior week. This robust production contributed to a build in ethanol stocks by 288,000 barrels, reaching 22.655 million barrels as of October 31.

Despite a prolonged government shutdown preventing official export sales updates for over a month, market analysts estimate U.S. corn exporters sold a significant 0.8-2 million metric tons in the week ending October 30. This analyst consensus provides a bullish signal for demand, mitigating concerns from slightly lower ethanol exports and refiner inputs.

Key Decisions for Investors

• Investors should monitor the continued strength in ethanol production and its impact on corn demand, as this is a primary bullish driver.
• Given the government shutdown, pay close attention to private analyst estimates for corn exports as a proxy for demand, and be prepared for potential volatility once official data resumes.
• Consider potential long positions in corn futures or related commodity ETFs, given the current bullish sentiment driven by strong domestic grind and robust export estimates.