The January Crop Production Report from USDA caught commodity markets off guard, delivering bigger-than-expected numbers—especially for corn.
Most analysts were anticipating modest adjustments, but the report showed unexpected increases in both harvested acreage and yields. That combination pushed total corn production higher and sent a ripple through grain markets.
According to Tom Fritz with EFG Group, “The corn market tried to run, with the bean market early on. You know, doing the tout the. Okay, yesterday, we didn’t look at the sharply lower dollar. Let’s look at today. Well, the dollar, started to firm by midday, but the corn market couldn’t hold its, rally to save its life. And, you know, it’s interesting where, March corn stopped 427.75. On report day, January 12th, during the decline, March corn tried to stabilize briefly at the 428 level before it went down to 17.5 so 428’s your resistance. And, so, you know, the, the corn imbalance, meaning the, you know, the equation supply versus demand. We have super, super demand.”
The surprise weighed on corn prices as traders recalibrated expectations, while producers are now reassessing marketing plans in light of tighter margins.
Fritz adds, “You know, we’re, we had, recent record, ethanol grind. So, you know, the demand is not a problem, but supply, it’s going to take a while for the, corn market to get past that supply. That the USDA gave us on the 12th.”
With supply clearly outpacing demand for now, attention turns to exports, ethanol use, and South American production to see what could help rebalance the market moving forward.