Grain Spreads: Corn WASDE
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Commentary
A reach to new contract lows spurred short-covering strength from technically oversold territory as the week progressed for corn in my opinion. Traders have seemingly priced in bearish inputs as the marketplace continues to predict a record crop. USDA is likely to bump its new-crop yield estimate, though to what extent is the major question. Meanwhile, demand continues to prove solid, with 2025-26 export sales now more than double year-ago at this time. Moreover, old-crop exports are also on pace to top USDA’s current peg of 2.75 billion bushels. Private exporters reported sales of 125,000 MT of corn to unknown destinations for the ‘25/’26 marketing year per this morning’s USDA flash sales announcement. This follows yesterday's flash sales announcement of a combined 211,680 MT (8.33 million bushels) of ‘25/’26 corn sales split essentially evenly between Mexico and Guatemala as U.S. new crop corn export demand remains red hot. After yesterday's update from USDA, cumulative ‘25/’26 corn sales are now more than double where they sat at this time last year, remaining at their strongest pace since 2021’s record. That is also without a bushel going being sold into China for both the 24/25 and 25/26 marketing years to date. Managed money sits at 173K shorts after covering 7k this past week as of Tuesdays (8/5/25) close. Keep in mind we are supply side driven here and the weather remains favorable for high ratings in the Northern plains and the I -80 corridor. If weather issues emerge and persist like drought it will likely be from Missouri on south as rains are forecasted to miss in those regions deep into August. It’s never the same everywhere. The average trade guess is for yield to come in at 184.1 on Tuesday’s report with ending stocks pushed up to 1.9 billion versus 1.66 last month. Whisper numbers have yield predicted up to 188. Last year big yields were predicted into year end, only to be significantly revised by November as heat and dryness took its toll on yields. Will that pattern repeat?
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Sean Lusk
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