Corn Market Update: Gains Amid Tariff Developments
The corn market has seen early Thursday morning gains between 3 to 5 cents. This uptick in futures came after a notable spike on Wednesday, driven by President Trump’s recent announcement regarding tariff relief. Prices for corn contracts increased by approximately 4 to 6 cents across various months. However, preliminary open interest dropped significantly by 22,191 contracts, primarily due to exits from May contracts, which fell by 32,351 contracts. As of now, the national average cash corn price, according to CmdtyView, has risen by 5 1/4 cents to settle at $4.46 1/2.
In a move aimed at easing trade tensions, President Trump declared a temporary 90-day pause on tariffs for select countries, excluding China. While the 10% tariff remains unchanged for all others, the tariffs on goods from China have been raised to a substantial 125%. This shift is causing waves in the agricultural sector, as market participants adjust to the news.
The most recent data from the Energy Information Administration (EIA) revealed a reduction in ethanol production, with output falling by 42,000 barrels per day during the week ending April 4, totaling 1.021 million barrels per day. Despite this decrease in production, ethanol stocks have increased by 422,000 barrels, reaching a total of 27.034 million barrels. Notably, ethanol exports experienced a rise of 112 barrels per day, amounting to 174,000 barrels per day. However, inputs from refiners into ethanol processing decreased by 26,000 barrels per day to 872,000 barrels.
Looking ahead, the export sales data is projected to reflect between 0.7 and 1.3 million metric tons (MMT) of old crop corn sales for the week of April 3, with sales estimates for the 2025/26 marketing year ranging from 0 to 150,000 metric tons. This information is crucial for traders as they prepare for upcoming market movements.
The USDA is set to release its monthly World Agricultural Supply and Demand Estimates (WASDE) report later in the morning. Traders anticipate a downward revision in the U.S. ending stocks, with an average expectation of a 30 million bushel reduction, bringing the estimate down to approximately 1.51 billion bushels. The estimates vary, with a range between 1.405 billion to 1.605 billion bushels. Expectations also suggest that projections for South America will be adjusted, particularly Argentina and Brazil. Argentina’s crop is expected to be revised down by 0.7 MMT from March, adjusting it to 49.3 MMT, while Brazil’s corn crop estimate is anticipated to decrease slightly from 126 MMT in March to around 125.91 MMT.
Moreover, data released from CONAB indicates a notable increase in Brazil’s corn crop estimate, now projected at 127.75 MMT, mainly attributed to an increase in the second crop. Additionally, the Rosario Grains Exchange has updated Argentina’s corn crop estimate upward by 4 MMT, now forecasted at 48.5 MMT.
As the market continues to respond to these dynamics, prices are fluctuating. For May 25 contracts, corn closed at $4.74, up 5 cents, with current trading reflecting an increase of 4 1/2 cents. Nearby cash prices were tracked at $4.46 1/2, gaining 5 1/4 cents. July 25 contracts were reported at $4.80 1/2, increasing by 5 3/4 cents, while December 25 contracts closed at $4.50 3/4, up 5 cents with current prices up 3 1/4 cents. The new crop cash price now sits at $4.14, reflecting an increase of 4 1/2 cents.
As developments continue to unfold in the corn market, market participants remain vigilant. The effects of trade policies, production statistics, and global demand will be closely monitored in the days ahead.
