Thursday's Corn Futures Rally Fueled by Strong Demand Dynamics

NotSatoshi · 2025-12-26T04:29:49+00:00

Corn futures are experiencing a bullish trend driven by strong domestic demand and tight supply. Record ethanol processing and increased exports contribute to rising prices, supported by speculative positioning and a growing cash market.

NotSatoshi

2025-12-26 04:29:49

Abstract generation in progress

Corn futures continue their bullish momentum through Thursday’s morning session, with prices climbing 1¾ cents so far and building on Wednesday’s robust gains of 2 to 4½ cents. The market dynamics reveal a compelling story: robust domestic demand is colliding with limited supply expectations, creating upward pressure across the entire futures curve.

The EIA’s latest weekly report paints a particularly bullish picture for domestic demand. For the week ending December 12, ethanol processors ground corn at a record pace of 1.131 million barrels per day—a jump of 26,000 bpd from the previous week. Despite this increased processing volume, ethanol inventories actually drew down by 157,000 barrels to 22.353 million barrels, signaling that production is struggling to keep pace with demand. Refiner inputs of ethanol climbed 55,000 bpd to 906,000 bpd, while ethanol exports surged 66,000 bpd to reach 191,000 bpd.

Export appetite remains a key price driver. Traders anticipate the morning’s Export Sales data release will show 1-2 MMT in corn sales for the week ending November 27. International supply tightness extends beyond the United States—Brazil’s December corn shipments are projected at 6.35 MMT by ANEC, representing a 0.05 MMT uptick from the prior week.

On the speculative positioning front, managed funds added 34,142 contracts to their long side during the week of December 2, primarily through short covering. This accumulation has flipped their overall net position to long 23,270 contracts in corn futures and options, suggesting growing confidence among financial players.

The cash market has responded in kind, with the CmdtyView national average cash corn price rising 4 cents to $3.96¾. Meanwhile, open interest expanded by 2,852 contracts, indicating fresh capital entering the market. The futures complex reflected this strength across all delivery months: March 2026 corn closed at $4.40½ (up 4 cents, currently +1¾ cents), May 2026 at $4.47¾ (up 3¼ cents, currently +1½ cents), and July 2026 at $4.53½ (up 2½ cents, currently +1¼ cents).

The convergence of record ethanol demand, strong export interest, declining inventories, and bullish fund positioning suggests corn futures may continue testing higher levels if economic conditions remain supportive.

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