Corn Holding Steady, as Ethanol Production Slips Back

Corn futures are largely unchanged, with the December contract up slightly, while the national average cash corn price saw a modest increase. Recent EIA data indicates a decline in ethanol production to 1.091 million bpd and a build in stocks to 22.367 million barrels, even as refiner inputs remained stable and exports rose. Amidst the USDA shutdown, traders await corn sales data, while Rabobank forecasts Brazil's 2025/26 corn crop at 137 MMT, providing a forward-looking supply perspective.

Analysis

Corn futures are largely stable, with December contracts up a penny and others fractionally lower, while the national cash price rose 1 1/4 cents to $3.93 3/4. EIA data indicates a 21,000 bpd drop in ethanol production to 1.091 million bpd, alongside a 448,000 barrel build in stocks to 22.367 million barrels. Despite stable refiner inputs at 911,000 bpd, ethanol exports increased by 45,000 bpd to 175,000 bpd. This suggests a mixed demand picture for corn from the energy sector, with domestic production declining but exports showing strength.

The ongoing USDA shutdown creates an information vacuum, leaving traders to estimate weekly corn sales between 1.1 to 2.1 MMT. This lack of official data introduces uncertainty into short-term supply and demand dynamics. Rabobank's projection of a 137 MMT Brazilian corn crop for 2025/26 offers a significant long-term supply outlook, potentially influencing forward pricing and global trade balances.

Key Decisions for Investors

• Monitor upcoming USDA reports for clarity on domestic corn sales and inventory levels, as the current shutdown obscures key market data.
• Evaluate the implications of rising ethanol stocks and declining production on corn demand, considering potential short-term price pressure from this sector.
• Factor Rabobank's 2025/26 Brazilian corn crop forecast of 137 MMT into long-term hedging strategies or futures positions, as it suggests robust future supply.