Corn Showing Strength on Thursday Morning

Corn futures and cash prices edged higher Thursday, supported by new 2025/26 export sales to Mexico and Colombia, and robust new crop export estimates, despite an anticipated old crop sales reduction. While U.S. yield prospects from the ProFarmer tour are mixed (Illinois below record but above average, Iowa strong), and Argentina forecasts a 9.6% increase in 2025/26 acreage, the market balances these supply factors with strong ethanol exports at a 19-week high, even as overall ethanol production hit a 12-week low.

Analysis

Corn futures are exhibiting modest strength, supported by new-crop demand signals that are currently outweighing a mixed supply outlook and weaker near-term ethanol fundamentals. The market is pricing in confirmed private export sales of over 225,000 MT for the 2025/26 season to Mexico and Colombia, alongside strong analyst estimates for new crop business ranging from 0.9 to 2 MMT. This forward-looking demand is helping to offset an anticipated net reduction in old crop sales. On the supply side, the ProFarmer tour presents a conflicting picture: Illinois yields are projected at 199.57 bpa, down from last year's record but above the three-year average, while initial results from western Iowa show robust yields exceeding both last year's and the three-year average. Further weighing on long-term prices is a 9.6% projected increase in Argentine corn acreage for 2025/26. The energy complex adds another layer of complexity, with domestic ethanol production falling to a 12-week low and stocks building slightly, yet ethanol exports surged to a 19-week high, indicating resilient international demand for US corn byproducts.

Key Decisions for Investors

• Investors should closely monitor the full ProFarmer tour results for Iowa and Minnesota, as this data will serve as a critical near-term catalyst for resolving uncertainty in the US supply outlook.
• Consider the diverging fundamentals between crop years, where weak old-crop export data contrasts with strong new-crop bookings, potentially creating opportunities in calendar spread trades.
• For long-term positions, factor in the projected 9.6% increase in Argentine corn acreage for 2025/26, which represents a significant potential headwind from increased global supply.
• Track the divergence within ethanol data, as continued strength in exports could offset weak domestic production and provide a demand floor for corn prices.