Grain Market Climbs as USDA Tightens Supply Outlook

Corn markets demonstrated solid momentum on Tuesday, with futures contracts posting gains between 4 to 5 cents across the board—a bullish response to the USDA’s monthly supply assessment. The cash market mirrored this strength, with the national average Cash Corn price reaching $4.03 1/2, up 4 1/2 cents on the day.

The USDA Report Catalyzes the Rally

The WASDE report released this morning proved to be the key driver behind the upward price movement. The headline figure that caught traders’ attention: a 125 million bushel reduction to US ending stocks, which now sits at 2.029 billion bushels—significantly tighter than market expectations. Notably, the entire cut flowed into the export category, suggesting robust international demand for American grain.

On the global stage, the supply picture shifted meaningfully as well. World ending stocks for the 2025/26 season are pegged at 279.15 MMT, representing a 2.19 MMT decline from the previous month’s estimate. The most significant adjustment came from a build-up in carryover supplies, primarily in Argentina totaling 1.71 MMT, though the US reduction more than compensated for this increase. Ukraine’s production was trimmed by 3 MMT, adding further tightness to international inventories.

Market Positioning and International Demand

Speculative positioning data from CFTC filings during the week of November 4 revealed that corn traders reduced their net short position by 17,990 contracts, bringing the total to 71,516 contracts. This indicates a shift in sentiment among major market participants tracking the tightening fundamentals.

International buyers remained active, with a South Korean importer tendering for 132,000 MT of corn overnight, though the origin of supply was not disclosed. Export momentum from key suppliers continues robust: Brazilian corn exports for December are estimated at 6.3 MMT by ANEC, representing a 1.31 MMT increase from the previous week’s projection and a 2.03 MMT jump compared to December’s volumes last year.

Trade Policy Adjustments Support Market

Argentina made a strategic adjustment to its grain export tax structure, reducing the levy on corn by 1 percentage point to 8.5%, according to an announcement from the country’s economic ministry. Such policy moves can influence the competitiveness of regional supplies in global markets.

Futures Contract Settlement Summary

Reflecting Tuesday’s broad-based strength, contract settlements pops across the curve: Dec 25 Corn closed at $4.40 3/4 (up 4 1/2 cents), Mar 26 Corn at $4.48 (up 4 1/4 cents), and May 26 Corn at $4.55 1/2 (up 4 1/4 cents), with Nearby Cash finishing at $4.03 1/2 (up 4 1/2 cents).