Market Commentary for 12/12/25
Corn has stayed locked in a tight $4.30–$4.50 range for 70 of the last 74 sessions, and this “holding pattern” seems likely to persist until the January USDA crop report.
In 30 of the last 36 trading sessions, March corn traded in an even tighter range, between $4.40 to $4.50.
Some estimates indicate only one third of the US corn crop has been marketed this year.This suggests any rallies will be met with farmer selling, while end users will likely buy the breaks in prices.
The USDA also increased the corn export pace in this month’s report.But, to sustain that pace, corn prices can’t rise too high, or US corn risks losing competitiveness in the global market.
Feed & Residual
There is an interesting dynamic within the USDA’s Feed & Residual category.Despite animals on feed remaining fairly consistent over the last 5 years, the category’s numbers have been erratic, as this chart shows:
The 2019-2020 marketing year saw an increase likely due to covid lockdowns and less ethanol and export usage.
Ethanol and export numbers are easier for the USDA to estimate because they are reported daily or weekly.Feed usage is harder to track, because the amount of corn going into on-farm feed rations is uncertain, and substitutions with other ingredients often go unreported.
Tracking crop carryover year to year is also challenging.The amount of unsold 2023 corn rolled into the 2024 marketing year is probably larger than many farmers want to admit.This isn’t surprising considering prices dropped in 2023 from $6.25 in June to $4.50 by that November. That put values that year well below breakeven and caused many farmers to wait for a rally that ultimately never came.
While the 2024 crop enjoyed a rally above breakeven levels in the middle of winter last year not every farmer took advantage of the opportunity.Many were still sitting on unpriced grain at the end of summer. As a result, less grain was marketed before harvest.It seems that much of that grain found homes in temporary grain bag storage and farmers are expecting a price rally this winter just like they saw last year.
This holding over of grain between marketing years probably makes it very difficult for the USDA to estimate the exact number of bushels held in on-farm storage.Even a 1% total production miscalculation in a marketing year can mean a 150-million-bushel adjustment to carryout.If those bushels remain in storage long-term and the situation repeats itself again the following year, the cumulative impact over 2 years could leave 300million bushels still in the system, but not fully reflected in the reported carryout number, which could definitely impact prices.
Since it’s difficult to determine exactly how much is being used for feed or carried over from year to year, it appears that the USDA adjusts the residual category.As a result, in big crop years it might appear that total usage is increasing, when it’s actually the carryout that is increasing. Then, when a crop is short and prices rally, those extra bushels that had been sitting in storage for over a year or two start to move into the market, and the crop that was expected to be small actually grows or the feed demand decreases.Over time, these residual bushels even out between crop years and the feed category number decreases at least 300 million bushels.
I think this means the real feed number is probably closer to 5.6 or 5.7 billion bushels. And it’s likely that the current Feed & Residual 6.1 billion bushels will haunt the market for the next year and act as an anchor to prices.
Since the start of 2025, corn prices were only above breakeven for 4 days in February.That means that farmers this year haven’t sold much of their corn.Many believe that disease pressure in other parts of the corn belt was worse than is being reported and look for the USDA to adjust yield lower in the January report just like they did last year sparking a rally in prices.
Bottomline
Unless there is a yield reduction in January, there is very little reason for carryout and/or the Feed & Residual numbers to drop.I expect corn prices to trade sideways until the summer weather markets.
Programing Note
I was interviewed on Markets Now on Agweb this week, discussing current market conditions and what direction farmers can expect prices to go in the coming months.
Click here to view: Markets Now with Michelle Rock and Jon Scheve of Scheve Grain
For questions—or to receive marketing content like this directly—connect with Jon at jon@schevegrain.com or schevegrain.com.
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