Corn futures saw mixed movement with September-26 prices being $0-$0.05 lower due to a less threatening mid-range forecast, while Chicago Board of Trade December corn ended down $0.08 at $4.56-1/4, after briefly touching $4.65-3/4. The market's volatility is being driven by a tug-of-war between improved short-term US weather forecasts, which have tempered fears of acute pollination stress in mid-July, and a deteriorating outlook in Western Europe, particularly France, where a new heatwave is causing concern over potential yield losses of around one-third.
Traders are positioning themselves ahead of the USDA's World Agricultural Supply and Demand Estimates (WASDE) update. A Reuters survey indicates expectations of lower corn stocks for both old and new crops in the upcoming WASDE report. Specifically, a Bloomberg survey of analysts anticipates a cut in US old-crop corn ending stocks by about 66 million bushels to 2.079 billion bushels, and new-crop US ending stocks are expected to fall by around 61 million bushels to 1.899 billion bushels. Globally, analysts foresee a reduction in 2026/27 ending stocks from 281.2 to 278.9 million tonnes, confirming a slow drift toward tighter global corn availability if realized.
Despite the easing of US weather concerns reducing some weather-risk premium from futures, uncertainty remains regarding full reproductive period conditions. The USDA’s weekly export sales report, due Thursday, is another short-term driver, with market expectations ranging from 0.6–1.1 million tonnes for old-crop US corn sales and 0.6–0.9 million tonnes for new-crop. Robust ethanol demand, particularly for exports, continues to underpin domestic corn disappearance; the latest EIA data showed ethanol production at 1.093 million barrels per day, down 24,000 barrels per day week-on-week, while ethanol exports increased sharply by 74,000 barrels per day to 200,000 barrels per day.
Old crop export commitments at 3.384 billion bushels are up 24% year-over-year compared to the USDA's forecast of up 16%, representing 102% of the USDA forecast, above the historical average of 96%. This pace suggests the USDA export forecast of 3.325 billion bushels may still be too low. Argentine production forecasts from the BAGE and the Rosario Grain Exchange remain higher than the USDA's estimate, at 64 mmt and 68 mmt respectively, against the USDA's 61 mmt, with harvest 56% complete.
