DeLong Commentary

CBOT Pricing:

Corn posted modest gains of 0-2 cents. Strength in soybeans lent support, while a break in ethanol swaps pressured the market. The Dec-Mar spread narrowed to -15.27, its narrowest since July 2nd The Dec25 contract rose 2.25 cents to settle at $4.22, and the March contract added 1.5 cents to close at $4.3775.

Soybeans gained approximately 4-8 cents. November soybeans led the advance, gaining 7.5 cents and reaching their highest level since September 19th. Stronger Gulf bids and lower freight costs supported nearby futures. The Nov25 contract settled at $10.295, while the Jan26 contract closed 5.25 cents higher at $10.4425.

 

Market Headlines:

US farmer sentiment:

Purdue University’s CME Group Ag Economy Barometer Index rose by one point to 126. Survey results remained consistent with previous months. 71% of respondents said they believe the US is headed in the right direction. However, confidence in tariffs has declined. Only 51% expect tariffs to strengthen the agricultural economy in the long run, down from 63% in June and 70% in April and May. A majority of farmers appear to believe that government support could help offset tariff-related losses. 83% of respondents indicated that a program similar to the 2019 MFP is likely if the trade war continues to impact commodity prices.

USDA will not release its October Crop Production and WASDE report:

The USDA will not release its October Crop Production and WASDE report, originally scheduled for Thursday morning, due to the ongoing government shutdown. Despite the delay, Reuters published analysts’ expectations for the reports.

Traders expect corn yield and production to decline by 1%, while soybean estimates remain largely unchanged. The new crop US corn carryout is projected to reach a seven-year high, driven by September 1st stocks (the largest since the 2018/2019 marketing year).

The Mississippi River is facing low water levels and creates challenges for grain transport:

River levels recently stabilized, which is allowing a large volume of barges to come north. However, water levels are expected to decline once again, right as corn harvest ramps up. These low water levels have driven up barge rates which trickles down to the farmer. Increased transportation cost and low board prices have farmers seeking storage for their crop. But large September 1st stocks have created the largest storage deficit in the Corn Belt since 2016.

The US government shutdown is going into the eighth day and has no clear end: 

Yesterday, President Trump said that furloughed federal workers might not receive back pay. This move may be viewed as an effort to pressure lawmakers to conclude the shutdown. In addition, the Trump administration has also warned that if the shutdown continues, it may begin issuing reduction-in-force notices. These notices are permanent layoffs rather than temporary furloughs.

The Senate is expected to vote today on the funding bills again, after both measures failed to reach the required 60 votes for the 5th time on Monday.

Weekly EIA Ethanol Data:

(week ended 10.03.25)

US ethanol production 

Production rebounded to 1.071 million barrels per day from 995k barrels per day the previous week and the highest production level in four weeks. This rebound is in line with historical data as it is common for ethanol production to decrease in September and rise in early October. This week’s 1.071 mbpd production rate is an all-time same-week record high (the previous high for the first week of October was 1.040 mbpd in 2018). While this rebound was a large increase, it is only 3.2% above last year’s same week production. Roughly 4.3% above last year’s production is needed weekly to meet the USDA’s 2025/26 corn for ethanol usage estimate of 5.6 billion bushels.

US ethanol stocks 

Despite the jump in production, stocks held relatively steady last week. Stocks this last week were at 22.720 million barrels, compared to 22.764 million barrels the previous week. Stocks are moving back above year ago levels and even to the highest level they have been for the first week of October in seven years.  US ethanol stocks rebounded as well to 138k bpd from the previous week’s 18 week low of 88k bpd. Ethanol exports have averaged 110k bps over the last four weeks.

US gasoline demand

Demand rose to 8.919 mbpd from 8.518 mbpd the previous week but was 7.6% below last year’s same-week demand of 9.654 mbpd. Over the last four weeks gasoline demand averaged 8.802 mbpd.

Upcoming Reports:

As a result of the ongoing government shut down, it is unlikely to see any “non-essential” government reports.

 

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