Fundamentally Speaking

The U.S. is doing a lot more corn export business than had been expected. Another good weekly export sales figure suggests USDA will hike our overseas sales commitments in future WASDE reports after a 50 million bushel (mb) boost this month to 2.60 billion bushels (bb).

This would be the second largest amount ever sold as the current estimate is 400 mb higher than what USDA first estimated for the 2024/marketing year when it issued its first WASDE projection for corn exports a year ago at 2.20 bb.

This is one of the key reasons why the current 2024/25 U.S. corn stocks-to-use ratio is now pegged at 9.3% in the May 2025 WASDE vs. the 14.2% ratio given in the first WASDE estimate for this marketing year back in May 2024, a drop of 4.9%.

This chart shows the change in the U.S. corn stocks-to-use ratio from the first WASDE report of the year given in May to the one a year later, on the right-hand axis.

Reported on the left-hand axis is the dollar per bushel change in the spot corn price as of May 15 vs. the value a year earlier.

The figures in the yellow rectangles are the May stocks-to-use ratio. As noted over the past year, the 2024/25 corn stocks-to-use ratio has declined mostly based on higher demand projections, primarily due to exports, though food-seed-industrial utilization of corn projections have also edged higher over the past 12 months.

Normally a tightening of stocks would be expected to have a supportive impact on prices but that is not the case this year as spot corn values are down 23 cents, or 4.9%, since last May 15.

This year's 4.9% drop in the stocks-to-use ratio is the second largest such decline between the first WASDE report and the one a year later since the 2013/14 season, as is the current May ratio of 9.3%.

The stocks-to-use ratio has declined between the two WASDE reports 14 times since 2001, but five times prices have still gone down.

We do see that large upward or downward revisions in the stocks-to-use ratio do have a big impact on prices.

Back in the 2020/21 season, the stocks-to-use ratio fell by 13.9% resulting in a $3.99 rally in spot corn prices and an 8.2% fall in 2011 resulted in spot corn values climbing $3.22 per bushel.

On the other hand, a 13.9% increase in stocks-to-use ratio resulted in the 2004/05 season corn prices rallying by 88 cents, or 30.1%.

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