A Friendly but not Bearish Outlook on Corn
May 12, 2025
Zack Gardner
Grain Marketing & Origination Specialist
Why am I friendly toward corn?
In its April report, the USDA raised corn exports by 100 million bushels. Typically, the April report isn’t one that is closely watched, so any adjustments that happen on this report are noteworthy. The interesting point that made this adjustment significant was that it lowered our corn carryout (the estimated surplus at the end of the year) to 1.465 billion bushels (or 9.6 percent). I usually figure that a corn carryout below 10 percent is tight enough to be considered friendly. Also adding to this significance is that South America is still wrapping up their soybean harvest and is busy exporting soybeans. So, the only corn supply of meaningful volume is our old crop stocks here in the U.S. If anyone in the world needs corn before August (when Brazil’s safrinha corn crop becomes available), they’ll need to come to us.
Why am I only friendly and not bullish?
On the March 31 acreage report, the USDA said we intend to plant 95.3 million acres of corn this spring. With any sort of normal corn yield this year, that amount of production should bring our carryout (surplus) back up above the psychological 2-billion-bushel mark. Carryouts of 2+ billion bushels typically tend to give us $3.40–$3.90 cash corn at harvest. Playing devil’s advocate here, but what if we plant more corn than that? At the time I wrote this article, China had placed 125 percent retaliatory tariffs on U.S. goods. I could make the case that we should see a half-billion-bushel drop in new crop soy exports from this move, similar to what we saw during the trade war with China in 2018. Early price reactions to the tariff news were neutral toward corn and bearish toward soybeans, which was a last-minute incentive to plant more corn and fewer soybean acres.
Let’s set aside all this bearishness. I think the path of least resistance for corn is to creep higher. We’re the only corn exporter in town until August and we have a tight old crop corn supply. This means weather absolutely still matters. New crop corn isn’t in the bin yet! There’s still plenty of time for the weather to mess up Brazil’s safrinha corn or our corn crop that we just planted. Hopefully some upside in old crop corn prices will drag new crop prices higher with it, so we get a good chance to market the 95 million acres of corn we just planted.
Grain Marketing & Origination Specialist
Why am I friendly toward corn?
In its April report, the USDA raised corn exports by 100 million bushels. Typically, the April report isn’t one that is closely watched, so any adjustments that happen on this report are noteworthy. The interesting point that made this adjustment significant was that it lowered our corn carryout (the estimated surplus at the end of the year) to 1.465 billion bushels (or 9.6 percent). I usually figure that a corn carryout below 10 percent is tight enough to be considered friendly. Also adding to this significance is that South America is still wrapping up their soybean harvest and is busy exporting soybeans. So, the only corn supply of meaningful volume is our old crop stocks here in the U.S. If anyone in the world needs corn before August (when Brazil’s safrinha corn crop becomes available), they’ll need to come to us.
Why am I only friendly and not bullish?
On the March 31 acreage report, the USDA said we intend to plant 95.3 million acres of corn this spring. With any sort of normal corn yield this year, that amount of production should bring our carryout (surplus) back up above the psychological 2-billion-bushel mark. Carryouts of 2+ billion bushels typically tend to give us $3.40–$3.90 cash corn at harvest. Playing devil’s advocate here, but what if we plant more corn than that? At the time I wrote this article, China had placed 125 percent retaliatory tariffs on U.S. goods. I could make the case that we should see a half-billion-bushel drop in new crop soy exports from this move, similar to what we saw during the trade war with China in 2018. Early price reactions to the tariff news were neutral toward corn and bearish toward soybeans, which was a last-minute incentive to plant more corn and fewer soybean acres.
Let’s set aside all this bearishness. I think the path of least resistance for corn is to creep higher. We’re the only corn exporter in town until August and we have a tight old crop corn supply. This means weather absolutely still matters. New crop corn isn’t in the bin yet! There’s still plenty of time for the weather to mess up Brazil’s safrinha corn or our corn crop that we just planted. Hopefully some upside in old crop corn prices will drag new crop prices higher with it, so we get a good chance to market the 95 million acres of corn we just planted.