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Insight Focus
Corn has rallied on the WASDE yield cut despite higher stocks. US wheat stocks fell while global stocks rose, and Brazil raised corn output again. With September futures having expired, markets may correct as the cut to corn ending stocks was small, acreage revisions face scrutiny, and harvest pressure builds.
Corn rallied in Chicago following a yield reduction in the September WASDE despite higher stocks. US wheat stocks were lower, while world stocks were higher. Brazilian corn production rose again.
The publication of the WASDE last Friday had no immediate impact in Euronext due to the time difference, so European grains should react to it this week. The new corn outlook leaves mixed feelings, as the acreage increase was unexpected. The lower yield was anticipated and justified by reports of disease in many areas. However, the market seems to believe the higher acreage is not justified. Using the old acreage figures combined with the lower yield would have resulted in production being lowered by almost 200 million bushels.
Now that the September futures for corn and wheat have expired in Chicago, the market is expected to digest last week’s WASDE. Some correction of last week’s rally may occur, as the downward revision to corn ending stocks was very small. The market will also look for confirmation of the higher acreage, as such a large revision is unusual for this time of year. As harvesting progresses, downside pressure is expected as more new-crop corn becomes available.
The average price of Chicago corn for the 2024/25 crop (September/August) closed at USD 4.37/bushel. Our estimate for the 2025/26 crop is for Chicago corn to average USD 4.18/bushel. The average price since September 1 is running at USD 4.03/bushel.
Corn Rallies on WASDE, Contract expiry
Chicago corn traded sideways until last Friday, when the expiry of the September futures and the publication of the WASDE coincided, pushing the market higher and generating all of the week’s gains in a single day.
The market was expecting lower new-crop stocks from a downward revision in corn yield, which indeed came in the September WASDE. However, the USDA increased acreage—both planted and harvested—offsetting the lower yield and resulting in 72 million bushels of higher production. The reduction in ending stocks of just 7 million bushels came thanks to higher exports. Still, the market posted strong weekly gains.
The September WASDE increased old crop ending stocks for US corn by 20 million bushels, due to lower corn use for ethanol and 5 million bushels fewer imports. For the new crop, the USDA raised production by 72 million bushels (+1.3 million acres but -2.1 bushels/year yield). However, this was more than offset by 100 million bushels of higher exports. As a result, new crop ending stocks actually declined by 7 million bushels.
Global corn stocks were reduced marginally by 1.1 million tonnes due to downgrades in production in Russia by 900,000 tonnes) and the EU by 2.7 million tonnes.
Source: USDA
Conab in Brazil again raised its corn production forecast to 139.7 million tonnes, up from 137 million tonnes previously. This would be an all-time high thanks to a record Safrinha (second) crop, compared with 115.5 million tonnes harvested in 2023/24. BAGE in Argentina kept its production forecast unchanged at 49 million tonnes.
US corn condition was 68% good or excellent, down one point week-on-week and compared with 64% last year. US corn harvesting has started, with 4% completed versus 5% last year. Argentinian corn is now fully harvested. French corn condition was 62% good or excellent, unchanged week-on-week and compared with 79% last year, with 2% harvested. Corn harvesting in Russia is 4.6% complete.
US Wheat Stocks Fall, Global Supplies Rise
On the wheat side, the Chicago market also rallied, though Friday turned negative, as the reduction in US ending stocks in the September WASDE came alongside an increase in world stocks. As with corn, Euronext was essentially unchanged week-on-week and will likely react to last Friday’s WASDE this week.
The September WASDE reduced US wheat stocks by 25 million bushels, entirely from higher exports.
Global wheat stocks were increased by 3.98 million tonnes, with a sizable upward revision of 9.3 million tonnes in global production. The main increases were 3.5 million tonnes in Australia, 1 million tonnes in Canada, 1.85 million tonnes in the EU, 1.5 million tonnes in Russia and 1 million tonnes in Ukraine.
Source: USDA
US spring wheat is 85% harvested versus 83% last year and the five-year average of 84%. US winter wheat is 5% planted, compared with 5% last year and the five-year average of 6%. Russian wheat is 76.6% harvested, with winter wheat planting at 23.4% complete. Ukrainian wheat is now fully harvested. In Argentina, wheat condition is 97.5% good or excellent, down half a point week-on-week.
The US Midwest is expected to remain warm this week with little to no rain, limited to the western Corn Belt. Brazil’s Centre-South is expected to remain dry, with some rainfall in the south. Argentina is forecast to remain dry, though rains may return by the end of the week. Northwestern Europe may see some rain, but conditions will be mostly dry. The Black Sea region is expected to have mixed conditions, with some areas receiving rain while others stay dry.
