Corn Futures Hit New Lows Amid Battling Fundamentals
Spot corn prices hit fresh lows on Tuesday, reaching a low of $3.71 a bushel. Cash prices are becoming more complacent below $4 since breaking below the key level in late June.
After signaling a tighter supply balance sheet among the U.S. and other global exporters last year, smaller carryouts have been largely discounted amid expectations for a record corn harvest from the U.S. and Brazil.
Earlier this month, the USDA lowered its 2025/26 global corn carryout to 10.8 billion bushels, reducing the world stocks-to-use ratio to 21.3 percent. The ratio is expected to be down from the 22.6 percent seen last year and the lowest since the 2012/13 season.
China, accounting for about 70 percent of global corn ending stocks, makes the balance sheet even tighter, considering those supplies are not available to the global market.
Despite perceived tight supplies, the market has been eyeing the potential for above-trendline U.S. corn yields. If realized, that would be the first time since the 2021 growing season. Total corn production is forecast at a record 15.71 billion bushels when accounting for the projected 181 bushels per acre yield forecast.
While not having a direct impact on final crop yields, corn condition ratings support overall good yields. Seventy-three percent of the crop was in good-to-excellent condition as of July 27, the best for the week since 2016.
Wet weather is expected for much of the Corn Belt over the next few weeks. A band of precipitation could stretch from Eastern Nebraska through Northern Indiana over the next few weeks. Combined precipitation and mostly mild temperatures throughout much of the growing season have resulted in little stress on the overall crop. Problem areas of drought and the trendy “tassel wrap” have remained isolated.
Stocks remain tight, but weak corn spreads have suggested little concern about supplies meeting current demand. Last year, it wasn’t until mid-August that spreads began to strengthen again. Once it became known that the USDA was too high on its 2024/25 carryout estimate due to demand picking up, fundamentals pointed toward a need for higher prices.
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