On Friday, corn futures went up because U.S. corn use, which is a good indicator of demand, went up more than supply. This helped prices recover from early losses that had pushed them to their lowest level since 2020.
It was reported by the U.S. Department of Agriculture on Friday that U.S. corn use was “slightly” higher than supply. This meant that corn stocks at the end of the 2024-25 marketing year were down 5 million bushels from what was expected in June, to 2.097 billion bushels.
To Sal Gilbertie, chief investment officer at Teucrium Trading, that statement was “enough to stop, at least temporarily, the bear market in corn prices.”
As soon as today’s WASDE report came out, it looks like short sellers started actively covering their positions. This happened at the same time that corn in the U.S. started to reach the important pollination stage of development, he said.
The amount of corn used in the U.S. was estimated at 14.905 billion bushels, up from 14.805 billion bushels in the June report.
Friday, the price of December corn in Chicago went up 5 cents, or 1.2%, to $4.15 ¾ per bushel (CZ24, +0.61% C00, +0.61%).
Corn in the U.S. has started to ‘enter the critical pollination stage of development.’
Sal Gilbertie, Teucrium Trading
Darin Newsom, senior market analyst at Barchart, said that after the USDA report, the price of December corn went up to its highest level since July 8. He called the rise a “knee-jerk reaction to ending stocks being lowered.”
For December, he said, there is technical and fundamental support in the $4.20 to $4.00 range.
Newsom said that a “cooler, wetter extended weather forecast” was pushing corn prices down before the report came out.
Dow Jones Market Data says that prices hit an intraday low of $4.03. This was the lowest price seen during the day since November 2020. Following the busiest contracts, prices are likely to drop 2.1% this week.
Prices have been going down because, according to Gilbertie, “there is plenty of corn.” He estimated that there would be 51 days of extra supply, which is equal to a 14% stock/use ratio, which is “very healthy.”
The USDA said that the U.S. would produce 15.1 billion bushels in 2024–2025. This is 240 million bushels more than the 14.86 billion bushels that they predicted in June. The USDA said that the June Acreage report showed more planted and harvested land.
According to the acreage report from June 28, the USDA planted 1.5 million more acres of corn and expected to harvest 1.3 million more acres as well, Newsom said.
