Corn Prices Find Support as Fertiliser Costs Threaten US Acreage

Insight Focus

All grains rise despite uneventful March WASDE. Chicago corn may correct after last Friday’s rally, but rising fertiliser prices and corn trading below cost of production could drive a shift in US acreage from corn to soybeans. Fewer corn acres would support Chicago corn prices, with consolidation likely above USD 4.5/bushel while the war in Iran continues.

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All grains were up despite the March WASDE being a non-event and record wheat production expected in India. There is a risk US farmers could plant fewer corn acres.

After last Friday’s rally, we could see some correction in Chicago corn this week. But the story is that there will likely be some migration of acres from corn to soybeans in the US, and maybe elsewhere, as the latter is less fertiliser intensive.
Corn prices have been trading below the cost of production for some time, and although most farmers buy their inputs for the new crop during the autumn, many had been waiting for the spring. Now, fertilizer prices have gone through the roof.

The question is not whether we will see fewer corn acres and more soybean acres, but how many. This will provide support to corn in Chicago. We would expect some consolidation above USD 4.5/bushel while there is no sign of the war in Iran coming to an end.

There are no changes to our estimate for Chicago corn to average USD 4.18/bushel during the 2025/26 (September/August) crop year, with some upside bias given possible lower production in the US. The average price since September 1 is running at USD 4.29/bushel.

Corn Rallies Despite Uneventful WASDE

Although last Monday was a negative day, corn in Chicago rallied early in the session following the initial rally in soybeans, pulled higher by Brent. It traded higher on Tuesday and Wednesday and got a push on Friday from strong net sales and the risk of lower US production, finally rallying 20 points on Friday.

But the market was volatile following the news about efforts to take measures to avoid higher Brent prices. The reality is that fertilisers will not see relief until traffic through the Strait of Hormuz resumes, as some 25%–30% of global fertiliser supply travels through the channel. There is already talk in the US that farmers will plant fewer corn acres in favour of soybeans, which require less fertiliser.

The March WASDE last week was a non-event, as the USDA made no changes to the February WASDE. The market was also expecting only an immaterial increase in ending stocks, as published by Bloomberg.
US corn ending stocks for the new 2025/26 crop were left unchanged at 2.13 billion bushels, and no changes were made to the old 2024/25 crop. However, world corn stocks were increased by 3.8 million tonnes, despite no increase expected by the market.

Source: USDA

That increase came from higher production, with 1 million tonnes less in Argentina, 1 million tonnes more in Brazil and 1.7 million tonnes more in Ukraine. Global consumption was also reduced by 800,000 tonnes.

Conab in Brazil made an immaterial downgrade to corn production, now at 138.3 million tonnes versus 138.4 million tonnes previously. This compares with 141.1 million tonnes harvested last crop.

Summer corn harvesting in Brazil is 29.5% complete versus 34.5% last year and the five-year average of 27.3%. Safrinha corn planting in Brazil is 75.9% complete versus 83.1% last year and the five-year average of 71.5%. Harvesting in Argentina is 7.2% complete.

Global Wheat Supply Signals Mixed

The March WASDE left US wheat ending stocks unchanged. World stocks were reduced marginally by 600,000 tonnes, reflecting 300,000 tonnes of higher production but 700,000 tonnes of higher consumption.

Source: USDA

The Indian farm ministry updated its wheat production forecast to an all-time high of 120.2 million tonnes, up from 118 million tonnes in the previous crop.

In Europe, the German farmers association DRV reduced its winter wheat production forecast to 20.8 million tonnes, down from 22.6 million tonnes last year. Total wheat production was projected at 22.3 million tonnes, down from 23.2 million tonnes last year.

French wheat is 84% in good or excellent condition, unchanged week-on-week, versus 74% last year.

Stormy weather and variable temperatures are expected in the US Midwest and Plains. Brazil is expected to be warm and rainy in the Centre-South, with rain also expected in Argentina. Warm temperatures and dry weather are expected in the Black Sea region as well as in Central Europe.

Webinar promo: “Who will Absorb the Americas’ Bumper Grain Crops?” on April 14. Includes photo of Kimberly Montagner, Market Analysis Advisory, and a “Click here to register” button. Text discusses record corn and soy production.

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Alberto Carmona

Alberto graduated at the University of Seville (Spain) and University of Paderborn (Germany) with a Bachelor in Economics and Business Administration and an Executive MBA from Institute San Telmo (partner school of IESE). Worked in Abengoa Bioenergy from 1999 through 2017 when I founded NixAl Commodities, an Ethanol boutique focused on market intelligence, risk management and engineering. Professional background in financial and commercial activities, promoting and financing renewable energy projects in Europe, Brownfields and Greenfields. I have been active in the international development of Bioethanol since 2001 having lived and worked in The Netherlands, Brazil and U.S., the three main markets, while leading global trading operations, risk management and lobbying.