Corn rallies on debate over corn production estimates

The corn market is entering harvest with a sharp divide in expectations, which opened debate about production and helped rally sluggish corn prices.

USDA’s August WASDE (World Agricultural Supply and Demand Estimates) report pegged the yield for the U.S. corn crop this year at a record 188.8 bushels per acre, which would push production to 16.7 billion bushels. But, by contrast, ProFarmer came out with its tour results the following week, and that came in at an estimated 182.7 bushels per acre.

“(That’s) roughly about 500 million bushels smaller, but that six-bushel gap just highlights how much uncertainty still hangs in this market over what production is going to be,” said Allison Thompson, president of The Money Farm, in Ada, Minn., adding that field level concerns are adding some weight to the debate, as well.

“Pollination issues have been reported in parts of Indiana and Ohio, but we’re also seeing disease pressure coming across the Corn Belt, as well. In some areas, it’s spread pretty quickly and now ranks as the number one threat across several states,” she said. “These stresses just raise questions about whether USDA’s top end yield will hold, and I think that’s why we saw the rally just over the past week.”

Looking at local prices, Thompson pointed out that in Mahnomen, Minn., prices for new crop corn is $3.60 and basis is 55-60 cents under.

At another local elevator in west central Minnesota regularly followed in this column, as of Aug. 25, the September cash price for old crop corn was $3.65 and basis was -27 cents under. The October 2025 futures price was listed at $4.516 and basis was +4 cents over.

On the demand side for corn, Thompson said the picture looks a lot better than it has in a few months. In that August report, USDA raised total use by about 545 million bushels with gains estimated in feed and ethanol use as well as exports.

“On top of that, global corn stocks are also projected at their tightest we’ve seen since 2012-13. It’s just a sign that international buyers are likely going to stay active,” she said. “And, on top of that, domestically we continue to blend for ethanol, too. We’ll see what happens with biofuels. We’re watching that very closely with soybeans, but corn should be looked at too because that could add some usage as well going forward.”

And looking ahead, the production debate is going to continue and will likely impact prices going into harvest.

“If USDA’s big crop does prove accurate, balance sheets will stay heavy, and prices will likely remain under pressure. I like that we saw the pop here, but we could end up trading a bit sideways until we get closer to final yields and what that actually looks like,” she said, adding the debate going on right now just kind of sets the stage for which direction prices move. “We could see some volatility and possibly some better market opportunities before (the) combines roll.”

As producers prepare for harvest and consider marketing strategies, Thompson said it's worth remembering that seasonal lows were printed at this same timeframe last year when September futures rolled off the board and went into delivery, so producers should use this window strategically.

“If you need to re-own some harvest sales or even some old crop sales that remain, now is a good time to get calls on the books going into fall, especially going into harvest. If we do see this rally continue, it would be good to have something in place,” she said.

“And if you’re planning on storing grain, (you’ve) got to start looking at some cheap puts to protect the downside. They just provide a simple, cost-effective insurance policy against some further weakness by keeping your door open for upside, as well,” she added.

But, as far as basis is concerned for corn, Thompson doesn’t see it getting any better soon.

“If we’re talking a big crop, it equals big supplies, and that just equals poor basis. And if the crop ends up being smaller, we could see futures rally and basis get worse just like we’ve seen on the soybeans,” she said.

“I just don’t have a very good look for basis until we probably get into later this winter or into spring, so if you’re delivering bushels at harvest, now is a good time to start locking in that basis. And if you do make the sales, make sure you’re re-owning those in case we do get a good bump on the futures side. And if you’re storing the corn, just make sure you’re watching those deferred contracts and pricing and looking at basis opportunities starting with March through July of 2026,” she concluded.