The corn market remains focused on the surprisingly bearish January 2026 USDA WASDE report, which increased U.S. corn yield, thus increasing U.S ending stocks for the 2025-26 crop year. Growing domestic demand hopes have been put on hold. All eyes to South American weather.
What’s happened
In last week’s blog post we looked at how the January WASDE report impacted corn prices, and the subsequent price fall out because of the bearish tone of the report.
Hope was maybe on the horizon for year-round E15 to help spur new demand for corn. In fact, early last week a Congressional bill to keep the government running through the end of the month originally included language to allow E15 fuel to be sold nationwide all year. However, congressional chatter quickly emerged that E15 mandates would not be included in upcoming negotiations ahead of the deadline later this week. The deadline is in place to prevent another government shutdown. Instead, E15 conversations and negotiations likely will take place later in the calendar year.
As it sits, from the data in the January 2026 USDA report, U.S. corn carryout is now pegged at a whopping 2.227 billion bushels. Now, without fresh friendly fundamental news in the short term for corn, the path of least resistance for corn futures prices may be sideways to slightly lower.
Without new demand news from year-round E15, is there anything on the horizon that could inspire a price rally? The answer is potentially yes, particularly as we look to South American corn production.
From a marketing perspective
Looking ahead over the coming weeks, traders are likely to keep an eye on South American weather, and specifically weather in Brazil.
Many questions are beginning to surface regarding second crop corn production in Brazil, known as the safrinha crop. The safrinha is planted in late February and early March right after the combines harvest soybeans in Brazil. The safrinha harvest begins in August, which is when many nations rely on it for import before the U.S. crop is available.
The question is: Can the Brazil corn crop afford to lose any production? Not really. And that matters to global corn production, global ending stocks, a potential increase in U.S corn export demand, and a potential corn price increase down the road.
Over the past decade, Brazilian farmers, taking advantage of their growing seasons and weather, discovered the benefit of double cropping corn behind soybeans. Their ability to double crop created a dramatic increase in corn production.
Back in 2011, Brazil corn production was near 75 million metric tons. But thanks to double cropping corn, production ballooned.
Right now, first crop corn, which primarily consists of 25% of their total expected production, is in production in Brazil. USDA currently estimates Brazil’s 2025-26 production to be 131 MMT, which means only about 33 MMT of corn is growing in their fields right now as first-crop corn. That also means that the remaining 98 MMT of expected Brazil corn production has yet to be planted.
This first-crop corn will be harvested in late February and March and primarily is kept in Brazil for their own domestic use. According to USDA, Brazil's domestic consumption is pegged at 96.5 MMT, with 66 MMT of that slated for domestic feed needs. So that means what is growing right now in Brazil will likely stay in the country for livestock feed. Additionally, some of that second crop corn also needs to stay in Brazil to meet further domestic demand.
The USDA pegs Brazil exports (which is the bulk of their second-crop corn) at 43 MMT. If Brazil exports 43 MMT, and they use 96.5 MMT for domestic consumption, then total demand is slated for 139.5 MMT. And yet, according to the USDA, they are expected to only grow 131 MMT. Hmmm.
When looking to Argentina, last year, Argentina corn production was 50 MMT. This year, USDA suggests their production capabilities will be at 53 MMT. But please note, all that corn is spoken for already in terms of demand: 16.7 MMT will be used for domestic needs and 37 MMT will be used for exports. That leaves combined demand at 53.7 MMT, using all their expected production.
Prepare yourself
Currently, with corn, if there is a weather issue in Brazil for the safrinha crop, the market may start to trade that news during the months of mid- to late March or April.
Regarding your marketing strategy, if you are choosing to sell corn in your bin sooner than later, perhaps consider a corn re-ownership strategy, just in case weather flares up in Brazil in a few months.
But also keep in mind, that holding out hope for a poor second-corn crop in Brazil is not a great way to market your corn in your bin. What if they end up having “good enough” yields and sufficient production to meet that demand? Be ready for anything.
Reach Naomi Blohm at 800-334-9779, on X: @naomiblohm, and at naomi@totalfarmmarketing.com.
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