US Corn Ending Stocks / Stock Use US Corn Ending Stocks / Stock Use
On the demand side of the equation the USDA is forecasting record usage at 15.955 bil. bu. still leaving ending stocks at a 7 year high at 2.117 bil. and stock to use ratio at a 6 year high at 13.3%. In order for demand to reach their forecast the USDA lowered the Ave. farm price to $3.90 bu., also a 6 year low. Over the course of the 2025/26 marketing year this demand will have to prove itself. My initial thoughts in July and early August were that this new crop demand outlook would be difficult to achieve given the massive size of the Brazilian crop. There is still much debate as to the actual size of their recently harvested crop. The USDA held their production estimate unchanged in Aug-25 at 132 mmt, the lowest forecast I’ve seen and still below their record production from 2 years ago a 137 mmt. Many private estimates are in a range from 137-140 mmt, with one as large as 150 mmt. The difference of 18 mmt is just over 700 mil. bu. of supply from our largest competitor in the global market. While I still feel the USDA is too low with their current forecast, I suspect production will hold between 135-138 mmt. Basis levels in Brazil remain stubbornly high resulting in US corn priced $5-$10 ton FOB below Brazilian offers out to Nov-25, which to me would rule out their crop being over 140 mmt. Domestic corn usage in Brazil continues to grow as they expand corn based ethanol production which has definitely benefited the US in the global trade.
1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400
600 800
Source:USDA Chart 3. Source: USDA.
Ending Stks Stocks/Use
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0%
While I think the upside potential for corn prices is limited in the near term given a record US harvest is staring us in the face, however I don’t think prices have to move significantly lower to drive demand. Ethanol margins remain decent with perhaps some export demand growth from some of the recent trade deals. All-time high cattle prices will eventually pull more cattle into feedlots. I suspect US farmers would be more inclined to sell some of this years harvest above $4.25 basis Dec-25 futures. Strains on storage capacity this fall however will likely keep basis levels and spreads wide. I think a trade above the mid-July high near $4.30 would be an indication the cycle lows were established shortly after the August USDA report. Chart 3.
Mark Soderberg E:
mark.soderberg@
admis.com
Disclaimer: Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The risk of loss in trading futures and options can be substantial. Past results are not indicative of future results or performance. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff. Research analyst does not currently maintain positions in the commodities specified within this report. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
6 | ADMISI - The Ghost In The Machine | Q3 Edition 2025
25/26-ADMIS 25/26 24/25 23/24 22/23 21/22 20/21 19/20 18/19 17/18 16/17 15/16 14/15 13/14 12/13 11/12 10/11 09/10 08/09 07/08 06/07 05/06
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42
