Corn Rounds Out the Week with Losses on Friday

Corn futures closed lower on Friday, extending weekly declines, with the national cash price falling to $3.65 1/2. This weakness precedes next week's USDA Crop Production reports, where analysts project a significantly higher national corn yield of 184.3 bpa and production of 15.995 billion bushels, an increase of 290 mbu from the last WASDE total. Despite a reported 125,000 MT private export sale for 2025/26 corn, accumulated old crop export shipments are lagging the average pace, while speculators have trimmed their net short positions.

Analysis

Corn futures demonstrated weakness into the weekend, with contracts declining 1 to 2 cents and the December contract slipping 5 ¼ cents for the week, reflecting bearish market sentiment. This price action is primarily driven by anticipation of next week's USDA Crop Production report, where analyst consensus points to a substantial increase in supply. The average surveyed yield forecast is 184.3 bushels per acre (bpa), which would drive production to 15.995 billion bushels—a notable 290 million bushel increase from the prior WASDE estimate. While a private export sale for the 2025/26 crop was reported, a more pressing concern is the lagging pace of current-crop export shipments, which at 90% of the USDA's target, trail the 93% five-year average. This physical shipment lag undermines the otherwise strong old crop commitments, which stand at 101% of the WASDE projection. From a positioning standpoint, Commitment of Traders data shows speculators remain heavily net short at 173,750 contracts, though they did trim their position slightly, while commercials modestly increased their net short, suggesting producers are hedging against further price declines.

Key Decisions for Investors

• Investors should position for potential price volatility ahead of next week's USDA report, as a confirmation of the forecasted 15.995 billion bushel crop would likely intensify downward pressure on futures.
• Monitor the divergence between export commitments and actual shipments; a failure for the shipment pace to accelerate could cap price upside, indicating that supply pressures are outweighing demand.
• Given the large speculative net short position, be aware of the risk of a sharp short-covering rally if the USDA's yield figures come in significantly below the high end of analyst expectations.