Corn Futures Decline Amid Mixed Ethanol Production Data

Corn futures are experiencing losses, with a report indicating a drop in ethanol production. The weekly EIA report revealed a decrease, raising concerns about future corn prices, particularly ahead of the upcoming quarterly grain stocks data.

Date: 27-03-2025

AI Rating: 5

Corn Futures and Ethanol Production Drop

The report highlights that corn futures have shown losses of 2 to 3 cents across most contracts, leading to a national average cash corn price of $4.21 ½. This price drop indicates bearish trends in the market.

The EIA report discussed in the analysis reveals that ethanol production has dropped by 52,000 barrels per day to 1.053 million bpd. This significant decrease can adversely affect the demand for corn, as ethanol is a primary use for corn in the U.S. A reduction in production may lead to future declines in corn prices.

Implications of Increased Stocks and Sluggish Ethanol Inputs

Additionally, the report states that ethanol stocks have risen by 775,000 barrels to 27.35 million barrels, with refiner inputs pulling back by 18,000 bpd to a total of 878,000 bpd. This build in stocks amidst lower production suggests a potential oversupply of ethanol, which could pressure corn prices further.

Looking ahead, the publication of the Quarterly Grain Stocks data is imminent, with expectations of 8.153 billion bushels of corn on hand as of March 1. Any significant discrepancy from these expectations could further influence market dynamics.

Furthermore, the international tendering activity, such as the purchase of corn by a Taiwan importer, introduces variables that could momentarily impact prices. However, consistent losses suggest an ongoing bearish sentiment toward corn futures.

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