
Daniel Flynn
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
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Ratings + Weather & Yields. The Corn & Ethanol Report 07/17/2025
We kickoff the day with Retail Sales MoM & YoY, Export Sales, Export Prices MoM & YoY, Import Prices MoM & YoY, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Retail Sales Control Group MoM, Retail Sales Ex Autos MoM, Jobless Claims 4-Week Average, Philly Fed Business Conditions, Philly Fed CAPEX Index, Philly Fed Employment, Philly Fed New Orders, Philly Fed Prices Paid, Retail Sales Ex Gas/Autos MoM at 7:30 A.M., Business Inventories, ed Kugler Speech, NAAB Housing Market Index, and Retail Inventories Ex Autos MoM at 9:00 AM., EIA Natural Gas Stocks 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., Fed Cook Speech at 12:30 P.M., Net Long-term TIC Flows, Foreign Bond Investment and Overall Net Capital Flows at 3:00 P.M., Fed Balance Sheet at 3:30 P.M., and Fed Waller Speech at 5:30 P.M.
While the consumer price inflation rate on Tuesday came in a little higher than expected, the Bureau of Labor Statistics reported that producer price inflation was slight less than expected on Wednesday. The Producer Price Index was reported at 148.28 in June, up just 0.01% from May and 2.3% higher than a year ago. It was the lowest annualized PPI inflation rate in 9 months. Overall, there not any significant changes in PPI. Prices for services declined 0.1% from May, while prices for goods were up 0.4%. June marked the first month that the PPI inflation rate was below the CPI inflation since September 2024. But the long term, both inflation rates are driven by raw materials. Currently, the CRB index is 9% higher than in July 2024, and a higher monthly July close would leave the CRB higher in 8 of the last 9 months.
Central US Weather Pattern Update
Extreme Midwest Heat Short-Lived; Soaking Rain Production Nearby:
The Central US forecast does feature prolonged heat in TX, OK, and KS, where max temps July 22-31 are projected in the upper 90’s and low 100’s. Elsewhere heat will be confined to July 22-26 period, and highs in E IA& east of the Mississippi River will be capped at 91-94 degrees. Additionally, soaking rainfall of 1-2” impacts IA, WI, IL, IN, OH. MI, and KY in the next five days. The buffers against heat stress there. Ridge-riding storms are probable across the N Plains & Great Lakes in the 6-10 day period. Amplified high pressure Ridging will be spread aloft the S Plains, Delta, and Mid-South next Wed-Sat. The best performing EU ensemble & AI models retrograded this Ridge back into the S Plains/ W Plains after July 26. The details of late July forecast do warrant monitoring, but as of now lasting adversity is not anticipated outside the S Plains.
2025 US Grain Storage Capacity & Crop Production
US grain storage capacity is expected to expand further in 2025-but only slightly. Storage capacity-which includes all major as well as minor crops like flaxseed and edible beans-since 1990. Official US grain storage capacity in 2024 totaled 25.48 Bil Bu, up another 35 Mil from 2023. Ag Resources (ARC) forecasts capacity in 2025 at 25.51 Bil Bu, up another 35 Mil Bu year-over-year-but notice that growth in capacity has slowed considerably since 2008. There will be more than enough storage in crop year 2025/26, but ARC’s work projects the ratio between capacity and total crop production to be the smallest since 2026 and the second smallest since 1990. The market’s focus since late June has been placed squarely on weather/yield model, but ARC’s longer-term concern is one of cash markets and what needs to be done to sort out large inventories come autumn/early winter. ARC currently projects US corn yield at 184 BPA, vs. USDA’s 181. ARC projects US soybean yield at 53.0, vs. USDA’s 52.5. Both can be fine tuned based on weather into late Aug/early Sep, but as of now ARC’s combined US corn & soybean production estimate sits 300 Mil Bu above USDA’s. Assuming, trend yields in all other crops, total crop production in 2025 will take up 89% of storage capacity, a level not seen since 2016. Fortunately, the tight nature of old crop US corn & soy stocks will not as much compete with newly harvested production, but it remains that cash markets must work to keep crush. Industrial and export disappearance elevated throughout the next 10-12 months. There is not an overly strong relationship between national/regional storage capacity and the details of the interior basis levels. But assuming normal weather in Iowa into late August, ARC projects combined corn & soy production there a record 3.35 Bil Bu, up 125 Mil from 2024. Grain storage in Iowa in recent years has stagnated at 358.Bil Bu, and so production in 2025 will account for 94% of capacity – also the largest since 2016 and the second largest since 1990. Combined corn & soy production in IA as a percent of storage capacity in that state is overlaid. Basis is more nuanced that corn and soy basis state-wide in Iowa (and elsewhere) stays negative until early 2026. There’s a non-zero risk that spot corn basis in central IA at harvest drops to 30-40 cents under CBOT futures. New crop corn bids in Cedar Rapids last night were quoted at 15-23 under. Use recoveries as hedges to downside risk.
Corn Comments & Analysis
CBOT Corn Adds More Risk Premium; Recoveries Remain Selling Opportunities:
Corn ended slightly higher for a third day as nearby forecasts allow extreme heat to impact the Southern Plains/SW Midwest after July 23rd and amid unconfirmed rumors China’s trade negotiation deadline will be extended to November. However, this implies a deal is unlikely to harvest which leaves the US feed market oversupplied in autumn. Importantly, the best performing weather models keep Midwest heat short in duration and net boosts in soil moisture are forecast into July 23rd. ARC views US weather as non-threatening to record national yield potential. ARC also projects the US crop to be 60-63% silking prior to the arrival of warmth/heat, and corn is mostly left to silk in ND, CO, and the E Midwest, where temps will be closest to normal next week. Strong resistance remains in place at $4.25-$4.30, basis Dec. Choppiness is possible until late July/early Aug weather is known. US origin is also competitive in the global marketplace. But ARC’s strategy remains to sell rallies amid the lack of meaningful weather threats not just in the US, but also in Mexico, Canada, the Black Sea & China. A heavy US cash market lies ahead.
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Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374