Corn Jul '22 (ZCN22)

Description

Corn is a member of the grass family of plants and is a native grain of the American continents. Fossils of corn pollen that are over 80,000 years old have been found in lake sediment under Mexico City. Archaeological discoveries show that corn cultivation existed in the southwestern US for at least 3,000 years, indicating that the region's indigenous people cultivated it as a food crop long before Europeans reached the New World. Corn is a hardy plant that grows in many different areas of the world. It can grow at altitudes as low as sea level and as high as 12,000 feet in the South American Andes Mountains. Corn can also grow in tropical climates that receive up to 400 inches of rainfall per year, as well as in areas that receive only 12 inches per year. Corn is primarily used as livestock feed in the United States and worldwide. Other uses for corn are alcohol additives for gasoline, adhesives, corn oil for cooking and margarine, sweeteners, and as food for humans. Corn is the largest crop in the US, both in terms of dollar value and acres planted.

The largest corn futures market is at the CME Group. Corn futures also trade at the B3 exchange, the Dalian Commodity Exchange, the Euronext Derivatives Market, the JSE Securities Exchange, the Matba Rofex exchange, and the Osaka Exchange. The CME futures contract calls for the delivery of 5000 bushels of No. 2 yellow corn at par contract price, No. 1 yellow at 1-1/2 cents per bushel over the contract price, or No. 3 yellow at 1-1/2 cents per bushel below the contract price.

Prices - CME corn futures prices (Barchart.com symbol code ZC) posted the high for 2025 in February at $5.0450 per bushel. Tightness in global supplies supported corn prices in early 2025 after the USDA cut its global corn ending stocks estimate in the February WASDE report to a 10-year low of 290.3 MMT. Prices were also supported by buoyant foreign demand for US corn, as cumulative 2024/25 US corn exports (September 1 through February 6) were 23.639 MMT, well above the 5-year average of 17.164 MMT, as foreign buyers ramped up their imports of US corn ahead of expected tariffs from President Trump. However, corn prices turned lower as escalation of US-China trade friction prompted the USDA to cut its outlook for China's 2024/25 corn imports to 8 MMT, down -66% yr/yr from 23.4 MMT in 2023/24. Corn prices recovered briefly in April after the USDA in the April WASDE report unexpectedly raised its US 2024/25 corn export estimate to 2.55 billion bushels from 2.45 billion bushels and cut its US 2024/25 corn ending stocks estimate to a 3-year low of 1.465 billion bushels. Corn prices trended lower into August, when they posted a 1-1/2-year low of $3.6875 per bushel, as favorable growing conditions raised expectations for a bumper US corn crop. The USDA in the August WASDE report raised its US 2024/25 corn production estimate to a record 16.742 billion bushels with a record yield of 188.8 bushels per acre. Also, Chinese demand for US corn was blocked by US tariffs, prompting China to seek corn supplies from Brazil and Argentina. However, dollar weakness kept foreign demand, aside from China, firm for US corn as the dollar index fell to a 3-year low in September. US September corn exports soared by +61% yr/yr to 275 million bushels as the weaker dollar spurred foreign demand for US corn. Corn prices traded sideways from October 1 through November 12, as the US government shutdown halted USDA crop data releases. Corn prices recovered slightly into the year-end on tighter supplies and strong foreign demand. The USDA in the December WASDE report cut its 2025/26 US and global corn ending stocks estimates more than expected and raised its 2025/26 US corn export forecast to a record 3.2 billion bushels, up +12% yr/yr. Corn prices finished 2025 down -4.0% yr/yr at $4.4025 a bushel.

Supply - World production of corn in the 2025/26 marketing year rose by +5.3% yr/yr to 1.296 billion metric tons. The world's largest corn producers are the US (33.4% of world production), China (23.2%), and Brazil (10.1%). The world area harvested with corn in 2025/26 rose by +1.6% yr/yr to 339.8 million hectares. World ending stocks of corn and coarse grains in 2025/26 fell by -1.0% yr/yr to 319.8 million metric tons.

US corn production for the 2025/26 marketing year (Sep-Aug) rose by +14.3% yr/yr to 17.020 billion bushels. US farmers harvested 91.258 million acres of corn for grain use in 2025/26, up by +9.9% yr/yr. The US corn yield in 2025/26 rose by +4.0% yr/yr to 186.5 bushels per acre. US 2024/25 ending stocks fell by -12.0% yr/yr to 1.551 billion bushels. The largest corn-producing states in the US in 2025 were Iowa (16.3% of US production), Illinois (13.8%), Nebraska (11.9%), Minnesota (10.0%), and South Dakota (6.4%).

Demand - World consumption of course grains in the 2025/26 crop year rose by +3.8% yr/yr to a record high of 1.593 billion metric tons. The largest category of usage in 2025/26, aside from animal feed, was ethanol production (alcohol fuel), with 5.600 billion bushels, which accounted for 80.2% of total non-feed usage. That is up by +3.0% yr/yr. After ethanol, the largest non-feed usage categories are high-fructose corn syrup (HFCS) with 5.8% of US usage, glucose and dextrose with 4.7%, corn starch with 3.2%, cereal and other corn products with 3.2%, and alcoholic beverages with 2.4%.

Trade - US exports of corn in 2025/26 rose by +12.0% yr/yr to 81.284 million metric tons. Brazil's corn exports in 2025/26 rose by +4.9% yr/yr to 43.0 million metric tons. Argentina's corn exports rose by +25.4% yr/yr to 37.0 million metric tons.

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