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 Durable Goods Orders MoM, Durable Goods Orders Ex Transportation MoM, Durable Goods Orders ex Defense MoM, and Non Defense Goods Orders Ex Air at 7:30 A.M., Export Inspections at 10:00 A.M., 3-Monyh & 6-Month Bill Auction at 10:30 A.M., 2-Year & 5-Year Note Auction at 12:00 P.M., and Crop Progress at 3:00 P.M.
US consumer price inflation in September came in just below trade estimates, with the CPI up 0.3% from August and up 3.0% on an annualized basis. The food, good/beverage, meats, housing, medical care, education, and other goods and services indexes set record highs in September. Meat inflation was the highest at 8.5%, followed by 4% increases in the housing and other goods and services indexes. While the prices of goods and services continue to set record highs, the inflation rate has been at 3% or less for 16 consecutive months. The Fed lowered rates in its last decision, and additional rate cuts are expected amid stable inflation rates and a weakening labot market.
Corn Supply/Demand 2026/27
The focus on the long-term ag market continues amid the absence of USDA data. Unfortunately, we can’t yet identify a bullish demand driver – other than a crippling drought in South America – that would alter prevailing bearish price trends mean fully,. CBOT rallies should be rewarded. The overall bearish landscape of the corn market includes a probable cut in US 2026 corn seeding. Corn’s cost of production is forecast to rise slightly next spring to $915 per acre vs. 897 in 2025, due to rising equipment and fertilizer costs. Estimated corn returns in 2026/27 assuming trend yield and current futures prices sit at a negative 434-$36/acre. Current estimated returns are $30 per acre worse than a year ago. A shift in seedings from corn to soy is inevitable – it’s a matter of degree. Yet, draws in US corn end stocks will be more a function of yield – first in South America and then across the Central US next summer. US corn stocks are surplus in 2025/26 due to large seeding and record large yield. Old crop yield will be revised as needed, but even a yield of 180 BPA keeps US end stocks perched at an abundant 2.1-2.3 Bil Bu. US 2026/27 US corn seedings are estimated at 92 Mil, down 6.7 Mil year-over-year, and Delta/Southeast producers actively switch to seeding soybeans. Assuming trend yield and modest expansion in total South American production, US 2026/27 US corn end stocks are projected to increase to 2.5 Bil Bu. Clearing large supplies will be difficult without a dire drought for a major feed-grain producer. ARC maintains domestic feed & industrial demand growth will be a challenged by cheap sorghum and stagnation in US gasoline consumption. Also, as was shown in 2024/25, US corn residual and feed use needs to be corrected downwards by at least 200 Mil Bu. 2025/26 US total corn demand is forecast at a record large 15,655 Mil Bu. The issue is that future gains in US corn usage are not expected with US 2025/26 corn exports already record large at 2,975 Mil Bu. ARC argues that WASDE is overstating US corn exports by 175 Mil Bu. Balance sheets will be revised once final 2025 yield is known and following 2026 US corn acreage intentions report in late March. Yet, ARC wishes to communicate that the most probable price scenario is one in which CBOT prices stay in a range of $3.80-$4.30 basis spot futures. ARC research forecasts US farmgate corn prices at 43.80/Bu in 2025/26 and $3.70 for 2026/27. US corn stocks/use must be pulled below 10-11% to sustain rallies above $4.50. Only when US corn stocks/use, or perceived stocks/use, exist below 10% with modest changes in the balance sheet have a meaningful price impact. Keep this in mind amid geo-political – based volatility in the short run. Balance sheets matter the most with respect to price discovery. March corn futures above 44.50 require threatening weather in South or North America for CBOT rallies to be sustained. Farmers must be focused on selling supply amid the premiums offered in the forward corn Futures.
Have A Great Trading Day!
Contact me directly with any questions or open a trading account at 1-888-264-5665 or dflyn@pricegroup.com.
Balance Sheets, Supplies & Trade Deals. The Corn & Ethanol Report 10/27/2025
We kickoff the day with Durable Goods Orders MoM, Durable Goods Orders Ex Transportation MoM, Durable Goods Orders ex Defense MoM, and Non Defense Goods Orders Ex Air at 7:30 A.M., Export Inspections at 10:00 A.M., 3-Monyh & 6-Month Bill Auction at 10:30 A.M., 2-Year & 5-Year Note Auction at 12:00 P.M., and Crop Progress at 3:00 P.M.
US consumer price inflation in September came in just below trade estimates, with the CPI up 0.3% from August and up 3.0% on an annualized basis. The food, good/beverage, meats, housing, medical care, education, and other goods and services indexes set record highs in September. Meat inflation was the highest at 8.5%, followed by 4% increases in the housing and other goods and services indexes. While the prices of goods and services continue to set record highs, the inflation rate has been at 3% or less for 16 consecutive months. The Fed lowered rates in its last decision, and additional rate cuts are expected amid stable inflation rates and a weakening labot market.
Corn Supply/Demand 2026/27
The focus on the long-term ag market continues amid the absence of USDA data. Unfortunately, we can’t yet identify a bullish demand driver – other than a crippling drought in South America – that would alter prevailing bearish price trends mean fully,. CBOT rallies should be rewarded. The overall bearish landscape of the corn market includes a probable cut in US 2026 corn seeding. Corn’s cost of production is forecast to rise slightly next spring to $915 per acre vs. 897 in 2025, due to rising equipment and fertilizer costs. Estimated corn returns in 2026/27 assuming trend yield and current futures prices sit at a negative 434-$36/acre. Current estimated returns are $30 per acre worse than a year ago. A shift in seedings from corn to soy is inevitable – it’s a matter of degree. Yet, draws in US corn end stocks will be more a function of yield – first in South America and then across the Central US next summer. US corn stocks are surplus in 2025/26 due to large seeding and record large yield. Old crop yield will be revised as needed, but even a yield of 180 BPA keeps US end stocks perched at an abundant 2.1-2.3 Bil Bu. US 2026/27 US corn seedings are estimated at 92 Mil, down 6.7 Mil year-over-year, and Delta/Southeast producers actively switch to seeding soybeans. Assuming trend yield and modest expansion in total South American production, US 2026/27 US corn end stocks are projected to increase to 2.5 Bil Bu. Clearing large supplies will be difficult without a dire drought for a major feed-grain producer. ARC maintains domestic feed & industrial demand growth will be a challenged by cheap sorghum and stagnation in US gasoline consumption. Also, as was shown in 2024/25, US corn residual and feed use needs to be corrected downwards by at least 200 Mil Bu. 2025/26 US total corn demand is forecast at a record large 15,655 Mil Bu. The issue is that future gains in US corn usage are not expected with US 2025/26 corn exports already record large at 2,975 Mil Bu. ARC argues that WASDE is overstating US corn exports by 175 Mil Bu. Balance sheets will be revised once final 2025 yield is known and following 2026 US corn acreage intentions report in late March. Yet, ARC wishes to communicate that the most probable price scenario is one in which CBOT prices stay in a range of $3.80-$4.30 basis spot futures. ARC research forecasts US farmgate corn prices at 43.80/Bu in 2025/26 and $3.70 for 2026/27. US corn stocks/use must be pulled below 10-11% to sustain rallies above $4.50. Only when US corn stocks/use, or perceived stocks/use, exist below 10% with modest changes in the balance sheet have a meaningful price impact. Keep this in mind amid geo-political – based volatility in the short run. Balance sheets matter the most with respect to price discovery. March corn futures above 44.50 require threatening weather in South or North America for CBOT rallies to be sustained. Farmers must be focused on selling supply amid the premiums offered in the forward corn Futures.
Have A Great Trading Day!
Contact me directly with any questions or open a trading account at 1-888-264-5665 or dflyn@pricegroup.com.
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374