EU CORN PRODUCTION
This summer’s heat and drought across much of Europe had a devastating impact on EU corn production. The USDA production estimate, currently just over 50 mmt, is down 11.6% from last year and the lowest in nearly 20 years. The shortfall will require the EU to import a record 25 mmt of corn in 2026/27 according to the European Commission, up 30% from 2025/26. Historically just over half of the EU corn imports have come from Ukraine. Given the logistical issues caused by Ukraine’s war with Russia, now in its 5th year, the US market share into the EU has grown from under 100,000 mt in 2021/22 MY to 2.75 mmt in 2024/25 while likely falling just below this figure in 2025/26. Until the logistical issues in shipping grain from the Black Sea region are resolved, look for US shipments to European countries to continue to build.
GROWTH OF THE CORN-BASED ETHANOL INDUSTRY IN BRAZIL
Another factor that continues to drive US corn demand in the global marketplace is the staggering growth of the corn-based ethanol industry in Brazil. The South American country has long been the 3rd largest corn producing country behind the US and China, while the 2nd largest exporter behind only the US. As we wind down the 2025/26 marketing year however, Argentina has passed Brazil as the 2nd largest exporter with expected shipments reaching 45 mmt, vs. 42 mmt from Brazil. Since peaking at just over 54 mmt 4 years ago, Brazilian exports have leveled off at 42-44 mmt each of the last 3 marketing years. Usage for ethanol production continues to grow at an accelerated pace. A decade ago in the 2016/17
marketing year, roughly .5 mmt of corn, or 20 mil. bu. was used to produce ethanol. In the 2025/26 marketing year usage is expected to reach nearly 23 mmt, or 900 mil bu. or 16% of their total production. According to the USDA Foreign Agricultural Service, there are 31 corn-based ethanol plants in Brazil with the capacity to produce 12.93 bil. liters annually, with another 20 plants at various stages of construction. By the mid-2030’s corn ethanol capacity is expected to grow to 23-25 bil. liters annually using 43-46 mmt of corn per year.
Growth in ethanol usage in Brazil is largely driven by Govt. policy. At the beginning of August, the mandatory ethanol blend in gasoline rose from 30% to 32%, this after rising from 27% to 30% just last September. If vehicle performance metrics pass final testing, Brazil’s Ministry of Mines and Energy is likely to recommend a permanent transition to E35 by early 2027. Ethanol consumption in 2026 is expected to reach 36-37 bil. liters with a longer- term goal of expanding to 48 bil. liters by 2035. Obviously, the more ethanol they produce and the more corn they use domestically, the less they can export into the global marketplace, creating opportunities for both the US and Brazil’s South American neighbor, Argentina.
Another factor that bears watching this winter is the weather phenomenon known as “El Niño.” As of this writing NOAA places the odds of this year’s weather pattern reaching a “Super El Niño” status at 90% by this fall or winter. To reach the “super” status, equatorial sea surface temperatures in the eastern Pacific must average 2 degrees C above average for a 3-month period. In July-26 the monthly average was +2.03 degrees C while spiking to +2.7 degrees by mid-August.
US Corn Usage Mil. Bu.
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000
- Source: USDA Feed&Residual Ethanol Exports Other FSI Feed/Residual Source: USDA Source: ADM Investor Services Inc. 5 | ADMISI - The Ghost In The Machine | Q3 Edition 2026 Exports Ethanol MMT's
10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0 65.0 70.0
0.0 5.0
Brazilian Corn Usage
0.0% 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
34/35 33/34 32/33 31/32 30/31 29/30 28/29 27/28 26/27 25/26 24/25 23/24 22/23 21/22 20/21 19/20 18/19 17/18 16/17 15/16 14/15
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