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Commentary
Corn futures spent much of the day session in negative territory today as any form of fresh buying interest was muted. Aside from crop tour reports there was little fresh news for the market today. Reports on the US corn crop remain favorable but there are enough trouble spots to bring the current USDA yield estimate into question in my opinion. It is my belief that yield could eventually snap back to the average trade guess from the August crop report near 184 to 185 BPA. Still a record but way off the most optimistic production estimates. We likely won’t see these potential revisions until the November and December reports when harvest results reveal any possible damage. Last August the USDA was at 183 for corn yield, by December they were at 179, so in my view there is context here. From a demand standpoint. USDA reports that 544 million bushels of U.S. new-crop corn have been committed on the export market already for the 2025-26 marketing year as of mid-August. That’s nearly double the 261 million bushels of commitments at this point a year ago. Strong sales to Mexico and to “unknown destinations” lead the way, but sales to other “regular” customers are above the norm in my opinion at this timeframe. That’s nearly double the 261 million bushels of commitments at this point a year ago. The USDA export program for the 25/26 marketing year is near a record and impressive considering not a bushel is earmarked for China so far. So, any downgrade of yield by 2, 3 or 4 bushels per acre could leave ending stocks back down to the 1.7/1.8 billion bushel area from 2.116 currently. Should that occur, corn is too cheap at present levels in my opinion. We will see what Pro Farmer and other tours guesstimate the yield at, but after the USDA acres and yield surprise, how much more bearish can this year’s crop estimates get? Trade Ideas coming later this week following tour results.
Trade Ideas
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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