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 Building Permits Prel, Housing Starts, Building Permits MoM Prel, Housing Starts MoM, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Continuing Jobless Claims, Jobless Claims 4-Week Average, Philly Fed Business Conditions, Philly Fed CAPEX Index, Philly Fed Employment, Philly Fed New Orders, and Philly Fed Prices Paid at 7:30 A.M., S&P Global Composite PMI Flash, S&P Global Manufacturing PMI Flash, and S&P Global Services PMI Flash at 8:45 A.M., EIA Natural Gas Storage at 9:30 A.M., Kansas Fed Composite Index and Kansas Fed Manufacturing Index at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., 10-Year TIPS Auction at 12:00 P.M., and Fed Balance Sheet at 3:30 P.M.
Nearby corn futures have generally followed historical seasonal trends throughout the 2025/26 crop market year, setting a low start of the year with the September 2025 contract, and trending higher as stocks are drawn down and supply seasonally tightens. The latest rally has put the market on par with the 10 and 20-year seasonal averages. Note that across all time frames , the corn market tends to forge a high around mid-June, and decline into the end of the marketing year. It requires adverse weather to sustain a rally in most years. The potential demand from China accentuates the need for at least trendline yields in Corn & soybeans. Seasonal price trends are down, but the sensitivity to weather and its impact on on US demand will be acute this summer.
Deal or No Deal
US Energy Market Balance Sheet Tightens Further:
Energy markets ended sharply lower on Wednesday as US President Trump indicated that the US and Iran were in the final stages of negotiations to end the war. There’s hope the Straight of Hormuz can return to normal operations before peak summer driving seasons in the Northern Hemisphere and ahead of spring planting in South America in Sep-Oct. Whether this is another deal unable to be implemented will be crucial as US energy balance sheets tighten rapidly. THE US in the week ending May 15thwithdrew another 10 Mil barrel from its strategic crude reserve. Still commercial crude stocks are unchanged year-over-year. When including strategic reserve stocks, US inventories sit at 819 Mil Barrels, down 3% from last year and the lowest for mid-May since 2023. Strategic crude reserves are down 40 Mil Barrels from late March. Energy & fertilizer markets are binary. An opening of the Straight starts crude on a path to $80-$85. The failure in negotiations could push the crude oil market to new highs near $130.
The Changing Structure of US Corn Supply & Demand
China’s Sending $17 billion on non-soybean ag goods from the US changes the structure of corn supply & demand into 2028. Fireworks will be sparked with any US/global weather, but balance sheets are tightening again. High production costs add to global contraction if the Straight of Hormuz isn’t reopened in the next 30 days. AG Resources (ARC) is confident that China will secure 5-15 MMT’s of US corn annually undera 3 year trade deal. In 2026, record Argentine exports will displace US corn in Central America and Africa, but ARC this week has lifted US corn exports to 3.5 Bil Bu, vs. ideas as low as 2.9 to 3.5 Bil Bu just 30 days ago. No one knows when China will start securing corn, but TRQ import licenses are available and could be used once China drops its 15% import duty. The market will pay close attention for Chinese purchases of US sorghum and corn once the duty is lowered. Projected US end stocks of 1.7 Bil Bu, and stocks/use of 10.3%, isn’t overly exciting. ARC’s price models suggest that, for now, this is largely built into values with Dec’26 at $4.90 and March’27 above $5.00. What has changed is the tolerance for a supply disruption or increase in US quarterly feed/residual use in June. A US corn yield above 187 leaves end stocks at or slightly above 2.0 Bil Bu. The market will stay bound to a range of $4.40-$5.00, with lows due in Aug and highs the following Apr-May. However, a national yield below 180 pulls end stocks down 1.3-1.4 Bil Bu, and raises post-harvest upside potential to $5.00-$6.00. Suddenly, the details of US acreage changes (ARC expects to be lower due to high import costs) and drought in the Western Plains – early-season crop ratings and July weather become highly important. The US and global markets reached a multi-year bottom in September 2025. The premium added to the market will be determined. But the collision of high energy costs, uncertain fertilizer availability in the US and South America, this year’s decline in US seedings of 3-5 million acres, and China resuming imports of 5-15 MMT’s of US corn work to drop US and global end stocks. The $17 Bil deal between the US and China is likely to add 200-600 million Bu of US corn export demand annually. Such demand along with China’s import pull on sorghum/wheat is enough to tighten stocks for a more bullish price phase. Importantly, the decline in global wheat supplies of major exporters of 50 MMT’s shifts global feed/ wheat demand to corn. Amis the war and tightening supplies, and $17 Bil in China securing additional ag products has tipped the scales with US farmers enjoying expanded profitability. Demand-led bull markets are ahead.
**AG Resources Corn Market Commentary**
CBOT Corn Corrects on Hope for End to War in Iran; Longer Term Outlook Complex/Supportive on Chinese Demand:
CBOT corn futures ended sharply lower amid crudes $6/barrel break. War in Iran has been two weeks from ending since March, but there’s optimism the US and Iran are in the final stages of negotiation. Biofuel crops were hit hardest on Wednesday, and indeed Midwest ethanol margins turn sour if cash ethanol prices return to $1.60-$1.70/Gal vs. $1.85-$1.95 currently. ARC also notes breaks during summer only been avoided if catastrophic Midwest drought has been present. Bearish trends prevailed even during the peak of Chinese demand for US corn in 2021 & 2022. However, ARC maintains downside risk in 2026 is limited to 20-40 cents. It’s unlikely China provides guidance that it’s moving forward with large purchases of US ag production until early/mid-summer. End users are recommended to leverage seasonal weakness with new purchases, and ARC will use additional sharp corrections to trim 2026 hedge positions. China’s agreement to purchase $17 Bil of non-soy US ag products changes the corn market’s structure. There will be far less tolerance for US/global weather adversity.
Have A Great Trading Day!
Contact me directly with any questions or open a trading account at 1-888-264-5665 or dflynn@pricegroup.com
China Syndrome + Energy + Corn Hedges & Weather. The Corn & Ethanol Report 05/21/2026
We kickoff the day with Building Permits Prel, Housing Starts, Building Permits MoM Prel, Housing Starts MoM, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Continuing Jobless Claims, Jobless Claims 4-Week Average, Philly Fed Business Conditions, Philly Fed CAPEX Index, Philly Fed Employment, Philly Fed New Orders, and Philly Fed Prices Paid at 7:30 A.M., S&P Global Composite PMI Flash, S&P Global Manufacturing PMI Flash, and S&P Global Services PMI Flash at 8:45 A.M., EIA Natural Gas Storage at 9:30 A.M., Kansas Fed Composite Index and Kansas Fed Manufacturing Index at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., 10-Year TIPS Auction at 12:00 P.M., and Fed Balance Sheet at 3:30 P.M.
Nearby corn futures have generally followed historical seasonal trends throughout the 2025/26 crop market year, setting a low start of the year with the September 2025 contract, and trending higher as stocks are drawn down and supply seasonally tightens. The latest rally has put the market on par with the 10 and 20-year seasonal averages. Note that across all time frames , the corn market tends to forge a high around mid-June, and decline into the end of the marketing year. It requires adverse weather to sustain a rally in most years. The potential demand from China accentuates the need for at least trendline yields in Corn & soybeans. Seasonal price trends are down, but the sensitivity to weather and its impact on on US demand will be acute this summer.
Deal or No Deal
US Energy Market Balance Sheet Tightens Further:
Energy markets ended sharply lower on Wednesday as US President Trump indicated that the US and Iran were in the final stages of negotiations to end the war. There’s hope the Straight of Hormuz can return to normal operations before peak summer driving seasons in the Northern Hemisphere and ahead of spring planting in South America in Sep-Oct. Whether this is another deal unable to be implemented will be crucial as US energy balance sheets tighten rapidly. THE US in the week ending May 15thwithdrew another 10 Mil barrel from its strategic crude reserve. Still commercial crude stocks are unchanged year-over-year. When including strategic reserve stocks, US inventories sit at 819 Mil Barrels, down 3% from last year and the lowest for mid-May since 2023. Strategic crude reserves are down 40 Mil Barrels from late March. Energy & fertilizer markets are binary. An opening of the Straight starts crude on a path to $80-$85. The failure in negotiations could push the crude oil market to new highs near $130.
The Changing Structure of US Corn Supply & Demand
China’s Sending $17 billion on non-soybean ag goods from the US changes the structure of corn supply & demand into 2028. Fireworks will be sparked with any US/global weather, but balance sheets are tightening again. High production costs add to global contraction if the Straight of Hormuz isn’t reopened in the next 30 days. AG Resources (ARC) is confident that China will secure 5-15 MMT’s of US corn annually undera 3 year trade deal. In 2026, record Argentine exports will displace US corn in Central America and Africa, but ARC this week has lifted US corn exports to 3.5 Bil Bu, vs. ideas as low as 2.9 to 3.5 Bil Bu just 30 days ago. No one knows when China will start securing corn, but TRQ import licenses are available and could be used once China drops its 15% import duty. The market will pay close attention for Chinese purchases of US sorghum and corn once the duty is lowered. Projected US end stocks of 1.7 Bil Bu, and stocks/use of 10.3%, isn’t overly exciting. ARC’s price models suggest that, for now, this is largely built into values with Dec’26 at $4.90 and March’27 above $5.00. What has changed is the tolerance for a supply disruption or increase in US quarterly feed/residual use in June. A US corn yield above 187 leaves end stocks at or slightly above 2.0 Bil Bu. The market will stay bound to a range of $4.40-$5.00, with lows due in Aug and highs the following Apr-May. However, a national yield below 180 pulls end stocks down 1.3-1.4 Bil Bu, and raises post-harvest upside potential to $5.00-$6.00. Suddenly, the details of US acreage changes (ARC expects to be lower due to high import costs) and drought in the Western Plains – early-season crop ratings and July weather become highly important. The US and global markets reached a multi-year bottom in September 2025. The premium added to the market will be determined. But the collision of high energy costs, uncertain fertilizer availability in the US and South America, this year’s decline in US seedings of 3-5 million acres, and China resuming imports of 5-15 MMT’s of US corn work to drop US and global end stocks. The $17 Bil deal between the US and China is likely to add 200-600 million Bu of US corn export demand annually. Such demand along with China’s import pull on sorghum/wheat is enough to tighten stocks for a more bullish price phase. Importantly, the decline in global wheat supplies of major exporters of 50 MMT’s shifts global feed/ wheat demand to corn. Amis the war and tightening supplies, and $17 Bil in China securing additional ag products has tipped the scales with US farmers enjoying expanded profitability. Demand-led bull markets are ahead.
**AG Resources Corn Market Commentary**
CBOT Corn Corrects on Hope for End to War in Iran; Longer Term Outlook Complex/Supportive on Chinese Demand:
CBOT corn futures ended sharply lower amid crudes $6/barrel break. War in Iran has been two weeks from ending since March, but there’s optimism the US and Iran are in the final stages of negotiation. Biofuel crops were hit hardest on Wednesday, and indeed Midwest ethanol margins turn sour if cash ethanol prices return to $1.60-$1.70/Gal vs. $1.85-$1.95 currently. ARC also notes breaks during summer only been avoided if catastrophic Midwest drought has been present. Bearish trends prevailed even during the peak of Chinese demand for US corn in 2021 & 2022. However, ARC maintains downside risk in 2026 is limited to 20-40 cents. It’s unlikely China provides guidance that it’s moving forward with large purchases of US ag production until early/mid-summer. End users are recommended to leverage seasonal weakness with new purchases, and ARC will use additional sharp corrections to trim 2026 hedge positions. China’s agreement to purchase $17 Bil of non-soy US ag products changes the corn market’s structure. There will be far less tolerance for US/global weather adversity.
Have A Great Trading Day!
Contact me directly with any questions or open a trading account at 1-888-264-5665 or dflynn@pricegroup.com
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374