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 Chicago Fed National Activity Index, Initial Jobless Claims, Continuing Jobless Claims, and Jobless Claims 4-Week Average at 7:30 A.M., EIA Natural Gas Storage 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., 10-Year TIPS Auction at 12:00 P.m., and Fed Balance Sheet at 3:30 P.M.
USDA’s July Milk Production report showed June output continuing to expand, but increase remained driven mainly by herd growth rather than stronger productivity. US milk production totaled 19.71 Bil Lbs, up 2.3% from June 2025, while second-quarter production reached 60.19 Bil Lbs, up 2.4%. The nat6ional dairy herd averaged 9.67 Mil cows during Apr-June, 192,000 more than a year earlier and 44,000 above the first-quarter average. June production per cow increased only 6 Lbs., or 0.3%, confirming that added cows supplied most of the additional milk. Among the 24 major states, production increased 2.4%, as cow numbers rose 185,000 head and output per cow gained 7 pounds. KS posted the largest percentage increase at 16.7%, followed y OR, GA, SD, CO, and TX. VA and WA were the only states reporting lower production. The report maintains a bearish supply bias for milk prices, as herd expansion continues despite limited improvement in per-cow output.
Central US Weather Pattern Update
Models Agree on Warmer Pattern July 25-Aug 5; Moisture Limited:
The Central US forecast is adverse. A prolonged period of rapid net soil moisture loss lies ahead, and in the last 24 hours the principal forecasting models have trended warmer across US Plains and Western Corn Belt next week. Dryness accompanies incoming heat, with rainfall into Aug 5 confined to ridge-riding systems across the Great Lakes region and the far eastern Midwest. 10-day forecasts feature zero rain in large parts of the Dakotas, IA, and W# MN. Max temps in the low 100’s favor Southern Plains , including Kansas, but temps in the mid-90’s will accelerate moisture loss in NE, SD, and IA. Considerable yield risk has returned as unwanted
Heat/dryness follows regionally excessive Midwest rainfall in June. Time runs short for a pattern change after the next t] wo weeks with soil moisture short to very short.
Corn Comments & Analysis
Corn Rally Accelerates on Warmer/Drier Central US Weather Forecast; End User Margins Strongly Positive:
New threats to US, exporter, and global corn supplies have emerged in the form of warmer Central US temps and less rainfall next week, while European forecasts allow warmth to regenerate and expand to corn-producing areas beyond July 28th. European drought will be historic in nature following August, and important this yearis that US & European production loss occurs at a time when Ukrainian FOB offers are impossible to find. The world can’t afford the loss of 10 + MMT’s of Ukrainian corn exports, or the markets will enter demand rationing if a war resolution isn’t found. The addition of price premium is not solely rooted in supply. Ethanol production margins are hugely profitable and only turn meaningful negative, if Midwest cash prices trade above $5.15/Bu as of today. Weaker ethanol prices are unlikely given the ongoing conflict in Iranb and should follow corn values higher. Initial upside is pegged at $4.95-$5.05 basis Dec, but it’s difficult to measure actual potential until more is known about late July/August Central US weather and its impact on US corn yield. A drop in US corn yield below 179 BPA opens up rally potential to $6.00 as US corn stocks/use ratio tightness below 8%. The nearby timing of a pre-harvest top in corn hinges on Central US weather and yield. Any harvest break creates a longer-term purchase opportunity.
Emerging Markets Continue Rally. The Corn & Ethanol Report 07/23/2026
We kickoff the day with Chicago Fed National Activity Index, Initial Jobless Claims, Continuing Jobless Claims, and Jobless Claims 4-Week Average at 7:30 A.M., EIA Natural Gas Storage 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., 10-Year TIPS Auction at 12:00 P.m., and Fed Balance Sheet at 3:30 P.M.
USDA’s July Milk Production report showed June output continuing to expand, but increase remained driven mainly by herd growth rather than stronger productivity. US milk production totaled 19.71 Bil Lbs, up 2.3% from June 2025, while second-quarter production reached 60.19 Bil Lbs, up 2.4%. The nat6ional dairy herd averaged 9.67 Mil cows during Apr-June, 192,000 more than a year earlier and 44,000 above the first-quarter average. June production per cow increased only 6 Lbs., or 0.3%, confirming that added cows supplied most of the additional milk. Among the 24 major states, production increased 2.4%, as cow numbers rose 185,000 head and output per cow gained 7 pounds. KS posted the largest percentage increase at 16.7%, followed y OR, GA, SD, CO, and TX. VA and WA were the only states reporting lower production. The report maintains a bearish supply bias for milk prices, as herd expansion continues despite limited improvement in per-cow output.
Central US Weather Pattern Update
Models Agree on Warmer Pattern July 25-Aug 5; Moisture Limited:
The Central US forecast is adverse. A prolonged period of rapid net soil moisture loss lies ahead, and in the last 24 hours the principal forecasting models have trended warmer across US Plains and Western Corn Belt next week. Dryness accompanies incoming heat, with rainfall into Aug 5 confined to ridge-riding systems across the Great Lakes region and the far eastern Midwest. 10-day forecasts feature zero rain in large parts of the Dakotas, IA, and W# MN. Max temps in the low 100’s favor Southern Plains , including Kansas, but temps in the mid-90’s will accelerate moisture loss in NE, SD, and IA. Considerable yield risk has returned as unwanted
Heat/dryness follows regionally excessive Midwest rainfall in June. Time runs short for a pattern change after the next t] wo weeks with soil moisture short to very short.
Corn Comments & Analysis
Corn Rally Accelerates on Warmer/Drier Central US Weather Forecast; End User Margins Strongly Positive:
New threats to US, exporter, and global corn supplies have emerged in the form of warmer Central US temps and less rainfall next week, while European forecasts allow warmth to regenerate and expand to corn-producing areas beyond July 28th. European drought will be historic in nature following August, and important this yearis that US & European production loss occurs at a time when Ukrainian FOB offers are impossible to find. The world can’t afford the loss of 10 + MMT’s of Ukrainian corn exports, or the markets will enter demand rationing if a war resolution isn’t found. The addition of price premium is not solely rooted in supply. Ethanol production margins are hugely profitable and only turn meaningful negative, if Midwest cash prices trade above $5.15/Bu as of today. Weaker ethanol prices are unlikely given the ongoing conflict in Iranb and should follow corn values higher. Initial upside is pegged at $4.95-$5.05 basis Dec, but it’s difficult to measure actual potential until more is known about late July/August Central US weather and its impact on US corn yield. A drop in US corn yield below 179 BPA opens up rally potential to $6.00 as US corn stocks/use ratio tightness below 8%. The nearby timing of a pre-harvest top in corn hinges on Central US weather and yield. Any harvest break creates a longer-term purchase opportunity.
Have A Great Trading Day!
Thanks,
Dan Flynn
Questions? Ask Dan Flynn today at 312-264-4374