Corn futures lost a dime on the week as a bearish USDA report on Tuesday pushed the December contract to new lows. The market is sitting just above the $3.90 short-term support level, which has held the past few sessions.

USDA surprised the market with a huge corn production figure on Tuesday. Bigger yields were expected, although the 188.8 bu/acre shown was well above even the highest pre-report estimate. In addition, USDA increased corn plantings by 2.1 million acres. The combined effect was a nearly 1 billion bushel increase in production, to a whopping 16.7 billion bushels.

Record usage projections raise questions

USDA jacked up corn usage in this month’s report, raising feeding, ethanol consumption and exports for a total disappearance of a record 16.0 billion bushels. While one might argue that lower prices encourage demand, this seems as much an attempt to keep the carryout from exploding as a likely outcome for disappearance.

The increase in exports may be justified based on large early commitments, but a big jump in feeding may be a stretch given the abundance of soymeal, DDGS, and other feedstuffs. This runs the risk of eventual downward revisions in usage, although that likely would only come into play in the second half of 2025/26.

Cross-commodity impacts

Low corn prices relative to other western Canadian feed grains was generating some early 2025/26 US export commitments. The forecast is for Canadian corn imports to increase to 2.4 million tonnes in 2025/26, from 1.6 million in the current season.

The threat of US corn imports will put a ceiling on the price of other prairie feed grains. This is already impacting barley markets, where domestic feeding could be reduced this year due to increased availability of US corn.

Market outlook remains bearish

A push lower in corn doesn’t leave any natural technical support until around $3.50. Any rebound will see resistance at $4.10, which has acted as both short-term support and resistance.

Recent trade seems more like market consolidation rather than forming a bottom, with the leaning for more downside, even if a temporary corrective bounce isn’t out of the question. Barring some kind of shock, stocks are simply too large to allow for anything more than a corrective bounce in the short and medium term.

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