Corn: Supply and Demand Drivers

Corn is the largest agricultural commodity by volume at over 1.2 billion tons of annual production and among the most traded at over 200 million metric tons shipped cross-border each year.  Corn is also among the versatile crops, capable of being used as a livestock feed, transformed into food ingredients, or processed into transportation fuel.  While ancient in origin, today’s corn plant has benefited from decades of research and development to boost its productivity.  

1) Key Trading Parameters:

Exchange Traded: Chicago Mercantile Exchange (CME), ICE Futures US

Price Quote: US dollars per bushel

Unit of Trade: 56-pound bushel

Futures Contact size: 5000 bushels

Contract Months:  March, May, Jul, Sep, Dec

Settlement: Physical Delivery 

2) Market Drivers

  1. Supply and Demand Dynamics:  The US is the leading producer of corn globally, accounting for about one-third of total supply, followed by China and Brazil.   Although a large producer, China consumes all its corn domestically and will at times supplement with imports. The US, Brazil, Argentina and Ukraine are the leading exporters.  Leading importers include the EU, Mexico and the Southeast Asian region led by Japan and Korea.
  2. Impressive yield growth:  Corn has benefited, perhaps more than any other crop, from advances in hybrid seed technology over recent decades. Enhancements to increase yield and improve resistance to pests and disease, as well as development of targeted varieties for multiple latitudes, has enabled corn to increase planted area and boost overall productivity.
  3. Multiple applications:  Corn is an excellent source of carbohydrates and is the predominant ingredient in commercial poultry and hog feed rations. In the food space, corn can be processed to produce food starch, sweetener, corn flour, vegetable oil and specialty food ingredients.  In the industrial space, corn serves as a feedstock to produce ethanol, for fermentation into citric acid and other industrial products and can even be converted into biodegradable plastic substitutes.  

3) Latest News and Analysis on Corn

US Corn and Soybean Exports Continue Downward Trend

US corn and soybean exports continued their downward trajectory in the week ending June 20, 2024, according to the latest export sales report from the US Department of Agriculture (USDA). This trend contrasts with a significant increase in US wheat sales, highlighting a mixed outlook for the US grain market.

Wheat Prices Rise on Strong Demand, but Monthly Losses Remain

Chicago wheat prices are on track for their first weekly gain in a month, driven by increasing demand, according to a report by Reuters. However, the grain is still poised to record its largest monthly decline since June 2022, as the northern hemisphere harvest and improved planting conditions in Argentina

US Corn Acreage Shrinks, While Soybean and Cotton Planting Sees an Uptick

The US corn acreage is projected to decrease for the 2024 growing season, while soybean and cotton acreage are expected to increase, according to the latest Acreage report released by the USDA's National Agricultural Statistics Service (NASS). The report, based on surveys conducted during the first two weeks

Brazilian Corn Prices to Surge as Ethanol Demand Fuels Domestic Consumption

Ethanol production is poised to drive up Brazilian corn prices, incentivizing domestic consumption and potentially limiting exports in the upcoming marketing year, according to an industry expert interviewed by S&P Global Commodity Insights last week. Arthur Neto, partner director at Alphamar Shipping Agency, predicts that corn usage for

China Aims to Close Corn Supply Gap Within Decade, But Challenges Remain

China is taking steps to bridge the gap between its domestic corn production and consumption, aiming to achieve self-sufficiency within the next decade, according to Li Shengjun, director of the monitoring and prediction department at China's national grain and oils information center (CNGOIC). Speaking at the International Grains

US Grain Exports Face Downward Revisions as Prices and Competition Shift

The USDA revising its forecast for corn and wheat exports downward, reflecting the broader landscape of shifting prices and global competition. In a report published on Wednesday, the agency forecasts US grain and feed exports to reach $37.6 billion in fiscal year (FY) 2024, a $600 million decline from

US Wheat Sales Rebound While Corn Exports Slide

US wheat sales rebounded in the week ending May 2, 2024, while corn exports continued to decline, according to the latest export sales data released by the United States Department of Agriculture (USDA). Net sales of US wheat for the 2023/2024 marketing year totaled 78,500 metric tons (MT)

US Corn Production Expected to Decline, But Exports to Rise Amidst Global Shifts

US corn production is projected to decline in the 2024/25 marketing year, but exports are forecast to rise as global production dynamics shift, according to the latest World Agricultural Supply and Demand Estimates (WASDE) report released by the USDA. The agency forecasts US corn production to reach 14.9
US Corn Production Expected to Decline, But Exports to Rise Amidst Global Shifts

Myanmar's Corn Production and Exports Remain Depressed Amidst Ongoing Conflict and Economic Challenges

Myanmar's corn production and exports are expected to remain subdued in the 2024/25 marketing year, hampered by ongoing conflict, economic instability, and logistical challenges, according to a report by the USDA's Foreign Agricultural Service (FAS). The report highlights the significant impact of civil unrest in

Corn and Soy Biofuels Get Green Light for Sustainable Aviation Fuel Tax Credits: WSJ

The Biden administration has expanded the eligibility for sustainable aviation fuel (SAF) tax credits to include corn- and soy-based biofuels, as reported by the Wall Street Journal. The new guidelines released by the Treasury Department last week aim at incentivizing the production and use of SAF, which is crucial for