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 Challenger Job Cuts at 6:30 A.M., Export Sales, Core PCE Price Index MoM & YoY, Personal Income MoM, Personal Spending MoM, Employment Cost – Benefits QoQ, Employment Cost-Wages QoQ, Employment Cost Index QoQ, Initial Jobless Claims, PCE Price Index MoM & YoY, Continuing Jobless Claims, and Jobless Claims 4-week Average at 7:30 A.M., Chicago PMI at 8:45 A.M., EIA Natural Gas Storage at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M, and Fed Balance Sheet at 3:30 P.M.
It has been a long time since July weather produced this much rain across the Central US. Going back to 2016 US crop yield was 7% above trendline at 174.6 BPA. An Ag Resources (ARC) US corn yield at 185.7 BPA 2.6% above the WASDE weather adjusted yield, and 1%above the 30-year trend yield at 183.5 BPA. Normal August weather can further increase the final US corn yield.
Central US Weather Pattern Discussion
Ideal Mix of Rain/Sun Forecast into mid-August; Heat Regulated to West:
Moderate shower activity will linger in the E Midwest overnight and welcomed drier pattern follows eastern NE, IA, and MN, where rainfall since July 15 has been recorded at 130-3200+% of normal. Rain instead expands into the Western & Southern Plains, and by August 5th the entire Central US will be well watered. Max temps in the first 10 days of August will be capped in the upper 70’s & low 80’s. Lows will exist comfortably in the 60’s. This favors later pollinating corn fields especially. The EU model’s 1-5 & 6-10 day precipitation forecast shows regional precipitation resumes across the NW Corn Belt after August 8th and 11-15 day guidance features high odds of near normal precipitation in mid-August. Dangerous/lasting high-pressure Ridging remains absent.
Corn Comments & Analysis
CBOT Corn Bounces On Oversold Chart; Oversupplied Market Ahead:
CBOT corn ended modestly higher as charts near oversold Tuesday P.M. However meaningfully bullish input is absent, and concern over trade barriers is renewed as a host of counties are at risk of prohibitively high tariffs – including Canada & Mexico. The arrival of tariffs is poorly timed as Brazil’s safrinha harvest reaches completion and Argentina’s surplus on August 1st is estimated at still-high 18 MMT’s. Additional tariff wrenches could be a gamechanger in trade deals cut with countries now recognizing Palestine. There was another trade deal was achieved with South Korea with very favorable details benefitting both sides before the August 1st deadline . Be prepared to sell further recoveries. US ethanol grind and prices move lower seasonally beginning in August. The Midwest ethanol swap market so far this week is down another $0.1/Gal at $1.76. Concern over too much rain across the W Corn Belt ends as 8-10 days of dryness are forecast in E NE, IA, and MN. A US yield above 185 BPA mandates lows at harvest of $3.50-$3.70, basis Dec. Downside risk is still sizable.
High Yields, Favorable Weather, and Tariff Pressure Compound Downside Risk. The Corn & Ethanol Report 07/31/2025
We kickoff the day with Challenger Job Cuts at 6:30 A.M., Export Sales, Core PCE Price Index MoM & YoY, Personal Income MoM, Personal Spending MoM, Employment Cost – Benefits QoQ, Employment Cost-Wages QoQ, Employment Cost Index QoQ, Initial Jobless Claims, PCE Price Index MoM & YoY, Continuing Jobless Claims, and Jobless Claims 4-week Average at 7:30 A.M., Chicago PMI at 8:45 A.M., EIA Natural Gas Storage at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M, and Fed Balance Sheet at 3:30 P.M.
It has been a long time since July weather produced this much rain across the Central US. Going back to 2016 US crop yield was 7% above trendline at 174.6 BPA. An Ag Resources (ARC) US corn yield at 185.7 BPA 2.6% above the WASDE weather adjusted yield, and 1%above the 30-year trend yield at 183.5 BPA. Normal August weather can further increase the final US corn yield.
Central US Weather Pattern Discussion
Ideal Mix of Rain/Sun Forecast into mid-August; Heat Regulated to West:
Moderate shower activity will linger in the E Midwest overnight and welcomed drier pattern follows eastern NE, IA, and MN, where rainfall since July 15 has been recorded at 130-3200+% of normal. Rain instead expands into the Western & Southern Plains, and by August 5th the entire Central US will be well watered. Max temps in the first 10 days of August will be capped in the upper 70’s & low 80’s. Lows will exist comfortably in the 60’s. This favors later pollinating corn fields especially. The EU model’s 1-5 & 6-10 day precipitation forecast shows regional precipitation resumes across the NW Corn Belt after August 8th and 11-15 day guidance features high odds of near normal precipitation in mid-August. Dangerous/lasting high-pressure Ridging remains absent.
Corn Comments & Analysis
CBOT Corn Bounces On Oversold Chart; Oversupplied Market Ahead:
CBOT corn ended modestly higher as charts near oversold Tuesday P.M. However meaningfully bullish input is absent, and concern over trade barriers is renewed as a host of counties are at risk of prohibitively high tariffs – including Canada & Mexico. The arrival of tariffs is poorly timed as Brazil’s safrinha harvest reaches completion and Argentina’s surplus on August 1st is estimated at still-high 18 MMT’s. Additional tariff wrenches could be a gamechanger in trade deals cut with countries now recognizing Palestine. There was another trade deal was achieved with South Korea with very favorable details benefitting both sides before the August 1st deadline . Be prepared to sell further recoveries. US ethanol grind and prices move lower seasonally beginning in August. The Midwest ethanol swap market so far this week is down another $0.1/Gal at $1.76. Concern over too much rain across the W Corn Belt ends as 8-10 days of dryness are forecast in E NE, IA, and MN. A US yield above 185 BPA mandates lows at harvest of $3.50-$3.70, basis Dec. Downside risk is still sizable.
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374