Dan Flynn is the writer of The Corn & Ethanol Report, a daily market letter covering grains, energies, and various global issues that are the driving force and backbone of the commodity markets. Contact Mr. Flynn at (312) 264-4374
We kickoff the day with Fed Kashkari Speech at 3:00 A.M., MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 5:00 A.M., Redbook YoY at 7:55 A.M., Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments Index, and Richmond Fed Services Revenues Index at 9:00 A.M., Dallas Fed Services Index and Dallas Fed Services Revenues Index at 9:30 A.M., 17-Week Bill Auction and 2-Year FRN Auction at 10:30 A.M., 5-Year Note Auction at 12:00 P.M., FOMC Minutes at 1:00 P.M., and API Energy Socks at 3:30 P.M.
The Federal Housing Finance Agency reported that the average price for single-family homes, with mortgages backed by Fannie Mae and Freddie Mac, declined fractionally in March. The agency’s House Price Index declined by less than 1% from February, but it was the first monthly downtick since August 2022. But compared to a year ago, the index was up 3.7% to mark the 157th consecutive month of year-over-year gains. All 9 census regions reported year-over-year gains, with the Middle Atlantic marking the strongest increase 6.8%, while the Pacific region saw the smallest increase of 1.8%. At the same time, the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index showed that home prices increased by 1.1% from February, marking the largest 1-month increase in 11 months, and were 4.1% higher than a year ago. US housing values have held despite rising 30-Year Mortgage Rates.
Central US Weather Pattern Update
US Drought to Shrink Further in Southern Plains; Central US Heat Absent into Mid-June:
The Central US forecast is viewed as ideal into June 12th . A mix of rain/sun will allow planting to near completion while also keeping soil moisture/crop ratings elevated in the early part of the growing season. In the near term, additional heavy rainfall boost soil moisture and shrinks the coverage of drought in OK, KS, and W NE. NOAA’s 7-day forecast showed, there’s agreement that widespread soaking rain impacts all but the far Western Plains in the 8-15 day period. Confidence in extended range guidance is low, but Ag Resources (ARC)does expect rainfall of 1-2” to impact NE, the Dakotas, IA, and MN June 4-6th. Water availability will not be a concern nearby. Central US temperatures will be mild this week and warm in the 6-10 day period before moderating again in the 11-15 day timeframe. No extreme heat has occurred to date since the 2025 crop growing cycle started April 10th.
Brazilian corn cash and futures prices continue to erode as the safrinha harvest is set to accelerate in June – the harvest was started in Mato Grosso – and as Brazilian corn production remains squarely above 130 MMT’s, compared to 119 MMT’s last year. A host of private estimates peg the 12025 Brazilian corn crop between 132-140 MMT’s. Harvest data that will help determine how big is big. Expanding ethanol production will absorb a portion of 2025’s gain output, but ARC expects Brazilian corn exports to reach 45-49 MMT’s, vs. 38 MMT’s in 2024, the second largest on record. Brazil’s spot cash corn index is now quoted at $5.32/Bu, vs. $5.90 in early May. The market is projected to make seasonal lows in July-August, ranging from $4.50 to $4.75. Brazilian corn competes with US-origin corn for August-September delivery, and ARC’s concern is that this year’s expansion in Brazilian corn production will be followed by a larger crop in Ukraine and record production in the US. Competition for importer demand will be steep without considerable N Hemisphere weather issues which will drop US 2025/26 corn exports back to 2,200-2,400 million bushels, compared to WASDE’s estimate of 2,675 million bushels.
Initial US Corn Rating vs. Yield
The 2025 corn crop has had a good start across much of the Midwest. Some areas experienced a record planting pace this year, benefiting from ideal conditions, while other areas, such as Southern Illinois, Indiana, Kentucky, and Ohio, faced rain delays that slowed the national average pace. NASS reported on Tuesday that 87% of the US corn crop had been planted as of May 25th which was 2% ahead of the 5-year average. 67% of the has emerged through Sunday, and NASS offered their first assessment of crop conditions this week, with 68% rated as good or excellent. Note that this is not ratings as a specific week, but the 1st condition score regardless of the date. This offers a fair comparison of the crops general health at a universal point of development. The long-term average for initial GD/EX ratings is 68%, and initial 2025 GD/EX ratings were right at the long-term average. With NASS’s initial crop conditions in hand the question is, do high/low crop ratings at the start of the season equate to large/small yields? There is a very slightly positive correlation between early season conditions and the final yield’s deviation from the May WASDE. Crops that appear good at the beginning of the season will perform well if summer weather is favorable, while there are plenty of years in which good-looking crops turn bas. In short, weather through the summer growing season (July) ultimately determines final yields. With all that said, it is worth noting, that in years in which initial GD/EX ratings are 70% or above, 12 (67%) of those years met or exceeded the May WASDE yield. However, final yields have been below the May WASDE estimate for 6 consecutive years, the longest steak since NASS began reporting crop ratings in 1986.
Corn Comments & Analysis
CBOT Corn Ends Steady/Weaker; Crop Rating Lower Than Expected; Massive South American Export Competition Ahead:
New Crop US corn futures closed lower while the July/December corn spread gained 4.25 cents to close at a 13 cent premium. Hope for US-European trade negotiations lend support to July. While it’s clear South American markets are more actively digesting larger crop sizes and the need for export demand from summer onward. Additional rainfall is expected for Parana and Mato Grosso do Sul in Brazil, resulting in a 7-12 MMT year-over-year increase in exportable supplies. The US corn crop is pegged at 68% on average. Notably, OH’s crop is rated 41% GD/EX, and ND’s at 48%. However, ideal early summer weather is probable. A counter-seasonal jump in national ratings is anticipated with just 67% of the US corn crop has emerge. Argentina is the world’s cheapest supplier of corn. Bearish seasonal price trends are expected to evolve from June 10th into harvest provided extreme Midwest heat is avoided. Sell rallies above $4.53 December corn futures for a harvest target of $3.70-$3.90.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 1-888-264-5665 or email at dflynn@pricegroup.com
Crop Progress Short of Expectations. The Corn & Ethanol Report 05/28/2025
We kickoff the day with Fed Kashkari Speech at 3:00 A.M., MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 5:00 A.M., Redbook YoY at 7:55 A.M., Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments Index, and Richmond Fed Services Revenues Index at 9:00 A.M., Dallas Fed Services Index and Dallas Fed Services Revenues Index at 9:30 A.M., 17-Week Bill Auction and 2-Year FRN Auction at 10:30 A.M., 5-Year Note Auction at 12:00 P.M., FOMC Minutes at 1:00 P.M., and API Energy Socks at 3:30 P.M.
The Federal Housing Finance Agency reported that the average price for single-family homes, with mortgages backed by Fannie Mae and Freddie Mac, declined fractionally in March. The agency’s House Price Index declined by less than 1% from February, but it was the first monthly downtick since August 2022. But compared to a year ago, the index was up 3.7% to mark the 157th consecutive month of year-over-year gains. All 9 census regions reported year-over-year gains, with the Middle Atlantic marking the strongest increase 6.8%, while the Pacific region saw the smallest increase of 1.8%. At the same time, the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index showed that home prices increased by 1.1% from February, marking the largest 1-month increase in 11 months, and were 4.1% higher than a year ago. US housing values have held despite rising 30-Year Mortgage Rates.
Central US Weather Pattern Update
US Drought to Shrink Further in Southern Plains; Central US Heat Absent into Mid-June:
The Central US forecast is viewed as ideal into June 12th . A mix of rain/sun will allow planting to near completion while also keeping soil moisture/crop ratings elevated in the early part of the growing season. In the near term, additional heavy rainfall boost soil moisture and shrinks the coverage of drought in OK, KS, and W NE. NOAA’s 7-day forecast showed, there’s agreement that widespread soaking rain impacts all but the far Western Plains in the 8-15 day period. Confidence in extended range guidance is low, but Ag Resources (ARC)does expect rainfall of 1-2” to impact NE, the Dakotas, IA, and MN June 4-6th. Water availability will not be a concern nearby. Central US temperatures will be mild this week and warm in the 6-10 day period before moderating again in the 11-15 day timeframe. No extreme heat has occurred to date since the 2025 crop growing cycle started April 10th.
Global Corn Market Update
Brazilian Cash Corn Market Sheds Risk Premium; Crop Estimate Rising:
Brazilian corn cash and futures prices continue to erode as the safrinha harvest is set to accelerate in June – the harvest was started in Mato Grosso – and as Brazilian corn production remains squarely above 130 MMT’s, compared to 119 MMT’s last year. A host of private estimates peg the 12025 Brazilian corn crop between 132-140 MMT’s. Harvest data that will help determine how big is big. Expanding ethanol production will absorb a portion of 2025’s gain output, but ARC expects Brazilian corn exports to reach 45-49 MMT’s, vs. 38 MMT’s in 2024, the second largest on record. Brazil’s spot cash corn index is now quoted at $5.32/Bu, vs. $5.90 in early May. The market is projected to make seasonal lows in July-August, ranging from $4.50 to $4.75. Brazilian corn competes with US-origin corn for August-September delivery, and ARC’s concern is that this year’s expansion in Brazilian corn production will be followed by a larger crop in Ukraine and record production in the US. Competition for importer demand will be steep without considerable N Hemisphere weather issues which will drop US 2025/26 corn exports back to 2,200-2,400 million bushels, compared to WASDE’s estimate of 2,675 million bushels.
Initial US Corn Rating vs. Yield
The 2025 corn crop has had a good start across much of the Midwest. Some areas experienced a record planting pace this year, benefiting from ideal conditions, while other areas, such as Southern Illinois, Indiana, Kentucky, and Ohio, faced rain delays that slowed the national average pace. NASS reported on Tuesday that 87% of the US corn crop had been planted as of May 25th which was 2% ahead of the 5-year average. 67% of the has emerged through Sunday, and NASS offered their first assessment of crop conditions this week, with 68% rated as good or excellent. Note that this is not ratings as a specific week, but the 1st condition score regardless of the date. This offers a fair comparison of the crops general health at a universal point of development. The long-term average for initial GD/EX ratings is 68%, and initial 2025 GD/EX ratings were right at the long-term average. With NASS’s initial crop conditions in hand the question is, do high/low crop ratings at the start of the season equate to large/small yields? There is a very slightly positive correlation between early season conditions and the final yield’s deviation from the May WASDE. Crops that appear good at the beginning of the season will perform well if summer weather is favorable, while there are plenty of years in which good-looking crops turn bas. In short, weather through the summer growing season (July) ultimately determines final yields. With all that said, it is worth noting, that in years in which initial GD/EX ratings are 70% or above, 12 (67%) of those years met or exceeded the May WASDE yield. However, final yields have been below the May WASDE estimate for 6 consecutive years, the longest steak since NASS began reporting crop ratings in 1986.
Corn Comments & Analysis
CBOT Corn Ends Steady/Weaker; Crop Rating Lower Than Expected; Massive South American Export Competition Ahead:
New Crop US corn futures closed lower while the July/December corn spread gained 4.25 cents to close at a 13 cent premium. Hope for US-European trade negotiations lend support to July. While it’s clear South American markets are more actively digesting larger crop sizes and the need for export demand from summer onward. Additional rainfall is expected for Parana and Mato Grosso do Sul in Brazil, resulting in a 7-12 MMT year-over-year increase in exportable supplies. The US corn crop is pegged at 68% on average. Notably, OH’s crop is rated 41% GD/EX, and ND’s at 48%. However, ideal early summer weather is probable. A counter-seasonal jump in national ratings is anticipated with just 67% of the US corn crop has emerge. Argentina is the world’s cheapest supplier of corn. Bearish seasonal price trends are expected to evolve from June 10th into harvest provided extreme Midwest heat is avoided. Sell rallies above $4.53 December corn futures for a harvest target of $3.70-$3.90.
Have A Great Trading Day!
Contact me directly with any questions or to open a trading account at 1-888-264-5665 or email at dflynn@pricegroup.com
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374