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 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. Used Car Prices MoM & YoY at 8:00 A.M., Wholesale Inventories MoM at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., 10-Year Note Auction at 12:00 P.M., FOMC Minutes at 1:00 P.M., and Consumer Credit Change at 2:00 P.M.
Iranian strikes on shipping has resulted in a US response and tough talk from President Trump. Citing for peace with Iran has been exhausted we could go back to a kinetic response and revoke Iranian oil exports privileges. Also making headlines is Spain’s refusal to spend more for their NATO membership which Trump responded could halt trade between the US and Spain if not cease. Spain’s US base could be replaced in Morocco. And President Trump also has brought up Greenland as a possible base for National & NATO security.
The US trade deficit widened sharply in May, but remained within the post-pandemic range. The goods and services deficit increased to $77.6 Bil, versus $54.6 Bil in April as exports fell and imports increased. The goods deficit expanded to $106.,5Bil, partly offset by a 28.9 Bil services surplus. The larger deficit looks to be a near-term drag on GDP. Higher imports of Pharmaceuticals, autos, crude oil, computer accessories, and semiconductors suggest demand remains firm and that AI/capital equipment supply chains are still pulling goods into the US. China remains politically important, but is no longer the dominant source of the monthly goods inbalance. The seasonally adjusted goods deficit with China was $14.5 Bil in May, smaller than deficits with Vietnam, Mexico, and Taiwan, confirming that tariffs continue to diminish trade imbalance.
Corn has been rightly placed upon less than ideal US weather, a middling crop rating, and rumors China is probing the US market. ARC maintains European production must be trimmed 5-7 MMT’s, and lingering in the backround are seasonal lows in Argentine fob prices and interior Brazilian flat prices. With US yield uncertain-unlike last year-fresh bearish input is lacking. Spot wholesale corn in central Mato Grosso this week is quoted at $131/MT ($3.32/Bu) vs. $1.28 MT ($3.24) last week. Bottoms are most often scored in Mato Grosso by mid-July has harvest pressure fades and ethanol plants and importers compete for available supply. Mato Grosso’s safrinha harvest was 44% last week and is forecast to reach 52-55% complete by Friday. A normal post-harvest recovery begins in Brazil’s cash corn market in August. Official US corn exports in M ay totaled 286 Mil Bu. Using FGIS inspection data, ARC estimates exports in June at 285 Mil Bu, and USDA in its July WASDE on Friday will, at minimum, hike its annual US corn export forecast 25 Mil Buto 3,350 Mil shipments in July and August each must average 260 Mil Bu to meet USDA’s current target, while ARC notes outstanding export sales as of June 25th totaled 621 Mil Bu, vs. 468 Mil the same week a year ago. The pace of new sales and shipments must be watched closely. If there’s no seasonal slowing of demand in July & August due to large South American surpluses, ultimately old crop US corn exports rise to 3,400 Mil Bu, and final end stocks drop to or below 2.0 Bil Bu. The relative tightening of the old crop US corn balance sheet, and implied tiughtening of new crop supply & demand has been swift. US corn still competes with Brazilian origin for summer delivery. US ethanol export demand is also adding to forward corn disappearance. US ethanol exports in May jumped to 190 Mil Gal, vs. 172 Mil in April and vs. 185 Mil in May 2025. Jan-May Us ethanol export shipments total a record 1.0 Bil Gal, up 12%year-over-year. Large buyers of US ethanol Canada and Europe will remain present in the US marketplace, particularly amid steep corn production loss in France. Recall monthly US ethanol exports as recently 2024 were routinely only 130-160 Mil Gal. Ethanol’s corn demand draw has struggled to exceed 5,500 Mil Bu, and challenges remain in the near term. But ARC projects corn grind in crop year26/27 to reach 5,600 Mil Bu amid reduced US sorghum surplus and sustained large ethanol exports. It’s just difficult to be bearish of US corn consumption.
NATO Meeting Headlines & Corn Disappearance. The Corn & Ethanol Report 07/08/2026
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. Used Car Prices MoM & YoY at 8:00 A.M., Wholesale Inventories MoM at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., 10-Year Note Auction at 12:00 P.M., FOMC Minutes at 1:00 P.M., and Consumer Credit Change at 2:00 P.M.
Iranian strikes on shipping has resulted in a US response and tough talk from President Trump. Citing for peace with Iran has been exhausted we could go back to a kinetic response and revoke Iranian oil exports privileges. Also making headlines is Spain’s refusal to spend more for their NATO membership which Trump responded could halt trade between the US and Spain if not cease. Spain’s US base could be replaced in Morocco. And President Trump also has brought up Greenland as a possible base for National & NATO security.
The US trade deficit widened sharply in May, but remained within the post-pandemic range. The goods and services deficit increased to $77.6 Bil, versus $54.6 Bil in April as exports fell and imports increased. The goods deficit expanded to $106.,5Bil, partly offset by a 28.9 Bil services surplus. The larger deficit looks to be a near-term drag on GDP. Higher imports of Pharmaceuticals, autos, crude oil, computer accessories, and semiconductors suggest demand remains firm and that AI/capital equipment supply chains are still pulling goods into the US. China remains politically important, but is no longer the dominant source of the monthly goods inbalance. The seasonally adjusted goods deficit with China was $14.5 Bil in May, smaller than deficits with Vietnam, Mexico, and Taiwan, confirming that tariffs continue to diminish trade imbalance.
Ag Resource South American Discussion
Brazilian Cash Corn Market Forming Bottom; Mato Grosso Safrinha Harvest 50% Complete
Corn has been rightly placed upon less than ideal US weather, a middling crop rating, and rumors China is probing the US market. ARC maintains European production must be trimmed 5-7 MMT’s, and lingering in the backround are seasonal lows in Argentine fob prices and interior Brazilian flat prices. With US yield uncertain-unlike last year-fresh bearish input is lacking. Spot wholesale corn in central Mato Grosso this week is quoted at $131/MT ($3.32/Bu) vs. $1.28 MT ($3.24) last week. Bottoms are most often scored in Mato Grosso by mid-July has harvest pressure fades and ethanol plants and importers compete for available supply. Mato Grosso’s safrinha harvest was 44% last week and is forecast to reach 52-55% complete by Friday. A normal post-harvest recovery begins in Brazil’s cash corn market in August. Official US corn exports in M ay totaled 286 Mil Bu. Using FGIS inspection data, ARC estimates exports in June at 285 Mil Bu, and USDA in its July WASDE on Friday will, at minimum, hike its annual US corn export forecast 25 Mil Buto 3,350 Mil shipments in July and August each must average 260 Mil Bu to meet USDA’s current target, while ARC notes outstanding export sales as of June 25th totaled 621 Mil Bu, vs. 468 Mil the same week a year ago. The pace of new sales and shipments must be watched closely. If there’s no seasonal slowing of demand in July & August due to large South American surpluses, ultimately old crop US corn exports rise to 3,400 Mil Bu, and final end stocks drop to or below 2.0 Bil Bu. The relative tightening of the old crop US corn balance sheet, and implied tiughtening of new crop supply & demand has been swift. US corn still competes with Brazilian origin for summer delivery. US ethanol export demand is also adding to forward corn disappearance. US ethanol exports in May jumped to 190 Mil Gal, vs. 172 Mil in April and vs. 185 Mil in May 2025. Jan-May Us ethanol export shipments total a record 1.0 Bil Gal, up 12%year-over-year. Large buyers of US ethanol Canada and Europe will remain present in the US marketplace, particularly amid steep corn production loss in France. Recall monthly US ethanol exports as recently 2024 were routinely only 130-160 Mil Gal. Ethanol’s corn demand draw has struggled to exceed 5,500 Mil Bu, and challenges remain in the near term. But ARC projects corn grind in crop year26/27 to reach 5,600 Mil Bu amid reduced US sorghum surplus and sustained large ethanol exports. It’s just difficult to be bearish of US corn consumption.
Have A Great Trading Day!
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374