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
(Note* The listed reports maybe suspended due to the government shutdown)
We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., CPI, NY Empire State Manufacturing Index, and Real Earnings at 7:30 A.M., 17-Week Bill Auction at 10:30 A.M., NOPA Crush Report at 11:00 A.M., Fed Bostic Speech at 11:10 A.M., Fed Miran Speech at 11:30 A.M., Fed Waller Speech at 12:00 P.M., Fed Beige Book at 1:00 P.M., Fed Schmid Speech at 1:30 P.M., and API Energy Stocks at 3:30 P.M.
The National Federation of Independent Business’s monthly survey of business owner’s optimism showed a slight downtick in September. The Small Business Optimism Index declined to a 3-month low of 98.5, down from 100.8 in August. However, the index has been above the long-term average in 9 of the last 11 months, after spending 34 consecutive months below average from 2022-2024. Nevertheless. The Uncertainty sub-index rose 7 points, the 4th highest reading on record, with owners citing unease over inflation, policy changes, and `demand. 24% of owners raised prices in September, and 31% plan to in the coming months. 64% of owners struggled with supply chain issues, while 14% cited inflation as their top problem. 18% of owners cited taxes as their largest problem and another 18% indicated that labor quality was their largest struggle. Overall, optimism remained above average, but the survey reflected growing concerns for the future. We will soon be making headlines on the Fed’s decision on interest rates at the Oct 29th meeting.
Corn Comments & Analysis
Corn Bounces; No Sign of US-Chinese Trade Truce; Global Cash Markets Unmoved:
CBOT recovered slightly, though the structure of the US and global feed markets stay unchanged without adverse South American weather. WTI crude’s finding new seasonal lows is weighing on cash ethanol prices. Spo Midwest swap ethanol has dropped from $2.00/Gal in late Sep to $1.86 currently. Dalian corn in China remains weak, and seasonally China’s corn market erodes further until harvest is completed – weaknes in China argues against large scale imports from any origin during autumn/early winter. Unfortunately, it’s difficult to find bullish input. Even Brazil’s cash market has stagnated counter-seasonally. Expanding ethanol production lent support to Brazil’s market in Aug-Sep, but current quotes are down slightly from a year ago in mid-Oct. Amid record production, there will be no shortage of corn in Brazil. Exports will persist well into late winter. The outlook is one of oversupply if weather issues are avoided in South America, but ARC is prepared to use recoveries/forward carries to manage 2026 & 2027 revenue.
2025/26 Major Export Supply & Demand
There will be no shortage of corn in exportable positions, and this underscores ARC strategy of using recoveries to hedge forward downside risk. Increasingly, it’s left to drought in South America in Dec-Jan to sustain rallies in feed markets. Even US corn export demand, which has been incredible to date, is at risk of changing early spring onward. USDA in its Sep report projected total exporter corn production in calendar year 2025 at a record 644 MMT’s, up 70 MMT’s (2.7 Bil Bu) from 2024. Even this is likely understated amid private Brazilian crop estimates of 138-140 MMT’s, vs. USDA’s 135., and Ukrainian estimate in recent weeks have risen 33-35 MMT’s, vs. USDA’s 32. In any case, importer’s access to corn outside the US will be the largest ever. USDA pegs non-US exporter production at 217 MMT’s. There are an additional 20 MMT’s (795 Mil Bu) available to the world marketplace in South America and Ukraine. Importantly, exporter corn supply & demand is nearing the threshold of oversupply ARC for now projects Argentine production at 55 MMT’s, vs. USDA’s 53. Amid larger 25/26 US carry-in stock and assuming a US yield of 185 BPA, exporter corn stocks this year will be 82 MMt’s up 33 MMT’s year-over-year. Note corn stocks/use of 12.5% still exists below peak oversupply in 2025 and 2015, but is aligned with most years between 2013 and 2019. Price discovery will be similar, which further suggests rallies to $4.30, spot, 44.50, March, and $4.70, Dec ’26 must be rewarded. A repeat of last year’s rapid tightening of US and exporter stocks is not anticipated. Rather, markets worldwide will continue to work to maximize disappearance. And ARC’s 25/26 corn exporter stocks/use of 12.5%may be understated if Argentina’s abnormally wet climate pattern lingers into December. USDA Argentine production forecast of 53 MMT’s is based on national yields of 7.07 tons/hectare – down 2.5% from last year and 1% below the 10-year average. Notice also that a yield of 7.07 MT/HA is the low end of the last 15 years-and so is much too low if normal weather continues. This is important is a yield of 7.90 MT/HA boost Argentine corn production in calendar year 2026 to 59 MMT’s. A yield above 8.0 MT.HA boosts production to 60 MMT’s. Dec weather is awaited, but most likely Argentine corn production in 25/26 will be record large. There’s no domestic demand growth to speak of there, and so any additional tonnage will be exported from April to December 2026. Much of corn’s price weakness is rooted in non-threatening weather globally. Spot CBOT may chop in a range of $3.90-$4.25 through the balance of autumn, but major supply dislocation – outright drought in South America – is needed to materially alter the current feed market landscape.
Have A Great Trading Day!
Contact me directly with any questions or open a trading account at 1-888-264-5665, 1-132-264-5674 or dflynn@pricegroup.com
Weather Premium Returns-Bulls Roll Dice on SA Drought. The Corn & Ethanol Report 10/15/2025
(Note* The listed reports maybe suspended due to the government shutdown)
We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., CPI, NY Empire State Manufacturing Index, and Real Earnings at 7:30 A.M., 17-Week Bill Auction at 10:30 A.M., NOPA Crush Report at 11:00 A.M., Fed Bostic Speech at 11:10 A.M., Fed Miran Speech at 11:30 A.M., Fed Waller Speech at 12:00 P.M., Fed Beige Book at 1:00 P.M., Fed Schmid Speech at 1:30 P.M., and API Energy Stocks at 3:30 P.M.
The National Federation of Independent Business’s monthly survey of business owner’s optimism showed a slight downtick in September. The Small Business Optimism Index declined to a 3-month low of 98.5, down from 100.8 in August. However, the index has been above the long-term average in 9 of the last 11 months, after spending 34 consecutive months below average from 2022-2024. Nevertheless. The Uncertainty sub-index rose 7 points, the 4th highest reading on record, with owners citing unease over inflation, policy changes, and `demand. 24% of owners raised prices in September, and 31% plan to in the coming months. 64% of owners struggled with supply chain issues, while 14% cited inflation as their top problem. 18% of owners cited taxes as their largest problem and another 18% indicated that labor quality was their largest struggle. Overall, optimism remained above average, but the survey reflected growing concerns for the future. We will soon be making headlines on the Fed’s decision on interest rates at the Oct 29th meeting.
Corn Comments & Analysis
Corn Bounces; No Sign of US-Chinese Trade Truce; Global Cash Markets Unmoved:
CBOT recovered slightly, though the structure of the US and global feed markets stay unchanged without adverse South American weather. WTI crude’s finding new seasonal lows is weighing on cash ethanol prices. Spo Midwest swap ethanol has dropped from $2.00/Gal in late Sep to $1.86 currently. Dalian corn in China remains weak, and seasonally China’s corn market erodes further until harvest is completed – weaknes in China argues against large scale imports from any origin during autumn/early winter. Unfortunately, it’s difficult to find bullish input. Even Brazil’s cash market has stagnated counter-seasonally. Expanding ethanol production lent support to Brazil’s market in Aug-Sep, but current quotes are down slightly from a year ago in mid-Oct. Amid record production, there will be no shortage of corn in Brazil. Exports will persist well into late winter. The outlook is one of oversupply if weather issues are avoided in South America, but ARC is prepared to use recoveries/forward carries to manage 2026 & 2027 revenue.
2025/26 Major Export Supply & Demand
There will be no shortage of corn in exportable positions, and this underscores ARC strategy of using recoveries to hedge forward downside risk. Increasingly, it’s left to drought in South America in Dec-Jan to sustain rallies in feed markets. Even US corn export demand, which has been incredible to date, is at risk of changing early spring onward. USDA in its Sep report projected total exporter corn production in calendar year 2025 at a record 644 MMT’s, up 70 MMT’s (2.7 Bil Bu) from 2024. Even this is likely understated amid private Brazilian crop estimates of 138-140 MMT’s, vs. USDA’s 135., and Ukrainian estimate in recent weeks have risen 33-35 MMT’s, vs. USDA’s 32. In any case, importer’s access to corn outside the US will be the largest ever. USDA pegs non-US exporter production at 217 MMT’s. There are an additional 20 MMT’s (795 Mil Bu) available to the world marketplace in South America and Ukraine. Importantly, exporter corn supply & demand is nearing the threshold of oversupply ARC for now projects Argentine production at 55 MMT’s, vs. USDA’s 53. Amid larger 25/26 US carry-in stock and assuming a US yield of 185 BPA, exporter corn stocks this year will be 82 MMt’s up 33 MMT’s year-over-year. Note corn stocks/use of 12.5% still exists below peak oversupply in 2025 and 2015, but is aligned with most years between 2013 and 2019. Price discovery will be similar, which further suggests rallies to $4.30, spot, 44.50, March, and $4.70, Dec ’26 must be rewarded. A repeat of last year’s rapid tightening of US and exporter stocks is not anticipated. Rather, markets worldwide will continue to work to maximize disappearance. And ARC’s 25/26 corn exporter stocks/use of 12.5%may be understated if Argentina’s abnormally wet climate pattern lingers into December. USDA Argentine production forecast of 53 MMT’s is based on national yields of 7.07 tons/hectare – down 2.5% from last year and 1% below the 10-year average. Notice also that a yield of 7.07 MT/HA is the low end of the last 15 years-and so is much too low if normal weather continues. This is important is a yield of 7.90 MT/HA boost Argentine corn production in calendar year 2026 to 59 MMT’s. A yield above 8.0 MT.HA boosts production to 60 MMT’s. Dec weather is awaited, but most likely Argentine corn production in 25/26 will be record large. There’s no domestic demand growth to speak of there, and so any additional tonnage will be exported from April to December 2026. Much of corn’s price weakness is rooted in non-threatening weather globally. Spot CBOT may chop in a range of $3.90-$4.25 through the balance of autumn, but major supply dislocation – outright drought in South America – is needed to materially alter the current feed market landscape.
Have A Great Trading Day!
Contact me directly with any questions or open a trading account at 1-888-264-5665, 1-132-264-5674 or dflynn@pricegroup.com
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374