Corn: A Changing Fundamental Environment

What’s Happened…

The August USDA World Agriculture Supply and Demand report (WASDE) suggested that the fundamental picture for corn is changing. In 2025, the U.S. produced a record 17-billion-bushel corn crop. Changes for 2026 are reduced acreage and yield, with this year’s crop now estimated at 16-billion bushels. Demand for the 2026/2027 marketing year is estimated at 16.33 bb, an increase from 16,255 for the 2025/2026 marketing year. Ending stocks (supply left over at the end of the marketing year) are expected to decline from 1.945 bb to 1.553, a change of 15%; not a small percentage. 

Excess supplies from record U.S. crops in the past two seasons are being utilized both domestically and internationally. Export estimates on this month’s report have rebounded substantially, with additional upward adjustments of 75 mb for both the 2025/2026 and 2026/2027 marketing season. Brazil and Argentina have also produced record crops in recent years. Low prices are curing low prices. Yet, low prices have also created difficult financial times for producers. Rising input costs could make it difficult for the world’s largest producers to grow a crop without a vision of financial gains. At some point, the price must reward this financial reality.  

It appears the market, through higher prices heading into harvest, may be on the verge of recognizing this. Speculative and managed money positions were near record longs when prices peaked in May. Strong farmer selling and good weather sent prices on the defensive. At the end of June, a bearish quarterly stocks and acreage report signaled value. Both end users and speculators again went aggressively long, buying on negative news. This is positive longer-term, signaling the market believes cheap corn should be bought.

Why this is Important…

Increasing demand, money flow on the buy side when prices drop, and a need for big crops have created a more robust and positive environment for higher prices. Buyers (end users) should view price dips as an opportunity to lock in long-term needs. Any disruptions with production in the year ahead could quickly send prices higher. Corn futures have traded very near or higher than $8 three times in the past: 2008, 2012, and 2022. For three years now, prices have been stuck in a range of $4 to $5. The odds of a price breakout to the upside are growing. Though $8 seems far away (and it is), supply disruptions could send prices higher. Generally, these are in the form of weather. This year, Europe has suffered drought and a smaller crop. A Super El Nino is forming, potentially creating production disruptions. 

Creating a balance between responsible cash sales and re-ownership is more important this year than in the prior two years, as the springboard for higher prices is being compressed. Selling corn for cash flow reasons, lack of storage, or the want to manage the risk of re-ownership are all reasons to consider strategies using futures and options in conjunction with cash marketing. A seamless approach to re-ownership is suggested. Meaning, don’t sell and wait for a setback, because it may not come.

What can you do about it?

Preparation, strategy, and execution are key elements to good marketing. Like a well-coached sports team, preparing for and anticipating the next move is paramount. Well–coached teams don’t wing it. They practice and prepare. They have a game plan. Marketing is no different. Take time now to know what you will do as price changes occur. Knowing your next move in advance makes the execution of a plan much easier. Strategic marketing takes good communication. Ensure you have a process set up for this and follow through. Establish a time each week dedicated only to marketing. Encourage your team members, whether they are your advisor, family member, buyer, or whomever, to help guide you to make decisions that are best for the operation. Thinking about something doesn’t get it done; action does.

Find out what works for you… 

Work with a professional to find the strategy or strategies that are best suited for your operation. Communication is important. Ask critical questions and garner a full comprehension of consequences and potential rewards before executing. The idea is to make good decisions for the operation and less emotionally–charged responses to market moves, which are always dynamic.

About the Author: With he wisdom of over 36 years at Total Farm Marketing and following across the Grain Belt, Bryan Doherty is deeply passionate about his clients, their success, and long-term, fruitful relationships. As a senior market advisor and vice president of Brokerage Solutions, Doherty lives and breathes farm marketing. He has an in-depth understanding of the markets and marketing tools, an excellent listener, and communicates with intent and clarity to ensure clients are comfortable with their decisions.

The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report. 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. Examples of seasonal price moves or extreme market conditions are not meant to imply that such moves or conditions are common occurrences or likely to occur. Futures prices have already factored in the seasonal aspects of supply and demand. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. 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 Total Farm Marketing. Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services, LLC is an insurance agency and an equal opportunity provider. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with all three companies. SP Risk Services LLC and Stewart-Peterson Inc. are wholly owned by Stewart-Peterson Group Inc. unless otherwise noted, services referenced are services of Stewart-Peterson Group Inc. Presented for solicitation. 

Author

Bryan Doherty