Corn Posts Double Digit Losses as Yield Cut Falls Short of Estimates

Corn futures closed lower on Friday, despite a weekly gain for December contracts, following the USDA's updated Crop Production and WASDE reports. The USDA reported a higher-than-anticipated corn yield of 186 bpa, leading to a significant increase in the 2024/25 carryout to 1.532 bbu and a 144 mbu rise in the 2025/26 supply estimate. Although increased exports partially mitigated this, the overall data points to ample supply, with the cash average price raised to $4.00 and recent large flash sales indicating robust demand absorption.

Analysis

Corn futures declined 10-11.5 cents on Friday, with the CmdtyView national average cash price falling 11 cents to $3.91 1/2, despite December contracts posting a 3-cent weekly gain. This daily downturn followed the USDA's updated Crop Production report, which indicated a higher-than-expected corn yield of 186 bpa, exceeding trader expectations of 184 bpa. This yield figure, a marginal 0.7 bpa decrease from September, still resulted in a 62 mbu reduction in output to 16.752 bbu.

The WASDE report significantly increased the 2024/25 carryout by 207 mbu to 1.532 bbu, contributing to a 144 mbu rise in the 2025/26 total supply to 18.309 bbu. While increased exports of 100 mbu partially mitigated this, the 2025/26 carryout estimate still rose by 44 mbu to 2.154 bbu, suggesting ample future supply.

Despite the increased supply projections, the USDA raised the cash average price by a dime to $4.00, indicating underlying price support. Furthermore, robust demand signals emerged from the backlog of flash sales, totaling 4.915 MMT between October 1 and November 12, with 4.367 MMT designated for the current marketing year. These substantial sales suggest strong absorption of the available supply.

Key Decisions for Investors

• Investors should recognize the mixed signals from the USDA reports, where increased supply projections are offset by robust export demand and an upward revision in the cash average price.
• Monitor future export sales data and global demand trends closely, as these will be critical in absorbing the higher carryout and influencing price stability.
• Evaluate positions in corn futures, particularly longer-dated contracts, considering the increased 2025/26 carryout estimates which could cap upside potential despite current demand strength.