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The Corn & Ethanol Report

Daniel Flynn
http://www.pricegroup.com/
dflynn@pricegroup.com


US/China Trade Deal: Corn Excluded, Futures Feel the Pinch. The Corn & Ethanol Report 10/31/2025

We kickoff the day with Employment Costs – Benefits QoQ, Employment Costa – Wages QoQ, Employment Costs Index QoQ, PCE Price Index MoM & YoY, Core PCE Price Index MoM & YoY, Personal Income MoM, and Personal Spending MoM at 7:30 A.M., Fed Logan Speech at 8:30 A.M., Chicago PMI at 8:45 A.M., Fed Bostic & Fed Hammack Speech at 11:00 A.M., and Baker Hughes Oil & Total Rigs Count at 12:00 P.M.

The report from the EIA released on Thursday showed that in 2024, US biofuels production capacity growth slowed sharply during 2024, rising only 3% from early 2024 to Jan 2025. The main drag was in renewable diesel and other biofuels – such as SAF and renewable propane – where capacity increased by just 391 million gallons per year, a fraction of the gains in prior years. Most growth came from two California projects: Phillips 66’s Rodeo refinery conversion (now 767 Mil Gal/year) and a new 138 Mil Gal/Year Bakersfield plant by Renewable Fuels LLC. Several facility closures partly offset those gains. The slowdown reflects weak biofuel margins and a lack of forward EPA policy visibility. RVO and SRE decisions by the EPA could be put off until 2026. Ethanol production capacity, however, expanded modestly – mainly in the Midwest – reaching 18.5 Bil Gal annually and now comprising about 73% of total US biofuel capacity. With domestic demand stabilizing, most of the additional ethanol output will be directed towards exports.

US Weather Pattern Update

Extreme Drought Present in IL, IN & OH; Soil Moisture Improved Elsewhere:

On balance, the coverage of Central US drought continues to erode. Recent soaking rainfall has nearly eliminated drought from the Delta region, TN, and southern MI. Extreme/exceptional drought remains in place across pockets of E Midwest, but moisture improvement is expected in OH/PA over the next 48 hours. The change in drought coverage/intensity over the last 12 months is striking, particularly with respect to moisture available to winter wheat. ARC notes drought in late October 2024 covered 72-85% of Southern Plains, but today only covers 4-12% of TX, OK, and KS. The primary concern heading into late autumn/winter are negative soil moisture anomalies across the PNW. Similar to Argentina & Southern Brazil, a weal La Nina has not negatively impacted precipitation patterns across TX and the Sothern US. La Nina ends before December.

Corn Comments & Analysis

Corn Drops as it was Excluded from US/China Trade Deal:

CBOT corn futures ended lower with South American fob markets heavy and lack of new bullish input. There’s no sign of Chinese demand for US corn, nor a sign China needs feed grains this crop year. China has been loath to secure Brazilian or Argentine corn for import amid its own domestic oversupply. Spot Dalian corn settled at $2.96/MT, down from $298 last week and $3.10 in late October 2024. Corn import margins into China are nonexistent. Recall China bought no corn from any origin in the 24/25 crop year, is a repeat ahead? Dec CBOT’s failure to breach its 200-day moving average sets up a test of $4.10-$4.16 in November – a seasonally bearish month for corn. ARC maintains that the weather in Argentina & Southern Brazil into January will dominate corn price discovery. 30% of Argentina’s corn will be near pollination without water issues – and there’s no sign of lasting dryness into mid-November. CBOT corn rallies will struggle with 1st Notice Day against December. ARC argues that large nearby US corn exports reflect frontloaded demand from traditional buyers. Catch-up sales/hedges on any modest rally with resistance above $4.50 March.

Have A Great Trading Day!



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Contact Dan at (888) 264-5665 or dflynn@pricegroup.com.