Global corn prices under pressure, but low stocks may provide support – Rabobank

Global corn prices are under pressure amid expectations of strong harvests in the US and Brazil, but low global stock levels could offer firm support and limit downside risks, according to an agriculture expert at Rabobank.

“We are expecting a very large crop out of the US, and that in isolation is a bearish development for prices. But when you zoom out and consider global stock levels, the picture becomes more supportive,” Charles Hart, a senior commodity analyst at Rabobank, said in an interview with S&P Global Commodity Insights.

The US Department of Agriculture is currently projecting corn yields above 180 bushels/acre for the 2025 crop, based on historical trends, but it largely depends on near-ideal weather conditions. According to Hart, early signs of weather stress, such as excessive rainfall and heat in some US regions, add uncertainty to these optimistic yield estimates.

“There are risks inherent in that forecast. Most things need to go right to reach those yield levels,” he said.

Beyond yields, US corn exports have been robust so far in the 2024-25 marketing year, which runs from September to August. This performance is partly due to limited stocks in other major exporting nations like Brazil and Argentina, for several seasons, with stocks-to-use ratios in those countries remaining historically low.

“These tight supplies have supported the US export program and corn prices,” the analyst said. “So, even if we see price headwinds from a large US crop in Q4, there’s also fairly firm support under the market.”

Hart cautioned that trade uncertainties remain a key variable in the outlook. While US corn is less exposed to geopolitical trade risks than US soybeans, the current global environment could still have an impact on flows.

Brazil exports in question

In South America, Brazil is also poised for a bumper harvest, with output at 131million-132 million mt, Hart said. However, he is skeptical that a larger crop will directly translate to proportional increases in export volumes. Much of Brazil’s safrinha crop is grown in interior regions like Mato Grosso, where transportation costs to ports are high. As a result, more corn is being diverted to the fast-growing domestic ethanol sector.

“There’s a strong economic argument for continued diversion to ethanol, especially in regions where export logistics are less favorable,” the analyst noted. “We’re seeing a structural shift in how Brazil uses its corn.”

Additionally, Brazilian corn stocks are also relatively low and may need replenishment, further limiting how much of the increased production makes it to the global market.

“In short, while Brazil’s production prospects are impressive, we don’t expect a one-for-one increase in export availability,” Hart said.

US exports defy tariffs

Despite the ongoing imposition of tariffs and rising global trade tensions, US corn exports have continued to perform strongly, showing resilience in an uncertain market environment.

So far, only China has imposed retaliatory tariffs on American agricultural goods. The EU has considered implementing similar measures, but it has yet to take action, leaving US agricultural exports largely unaffected.

A key distinction remains between the US baseline tariffs of roughly 10% and the agricultural export program, which continues to operate relatively unscathed. “The fundamentals driving corn demand globally remain robust, and tariffs have not significantly disrupted export volumes,” noted Hart.

US corn shipments, in particular, are performing well despite a reduction in Chinese demand this year — a trend seen across many bulk agricultural commodities.

The tariff-related pauses and reversals have introduced volatility and uncertainty into the market, yet the actual impact on export quantities has been limited.

“Retaliating through agricultural exports would be counterproductive for most countries given concerns over food inflation and cost of living,” Hart said.

China’s stockpiles cloud imports

The US-China trade relationship is quite distinct, particularly in sectors like soybeans, where Brazil has emerged as a clear beneficiary amid tariff-driven shifts, Hart noted.

China’s import figures for MY 2024-25 showed sizable declines across many commodities, attributed in part to stockpiling over previous years. These accumulated inventories may influence China’s import behavior in MY 2025-26.

“Whether China chooses to draw down inventories or divert imports remains to be seen,” said the Rabobank analyst. “It’s likely a combination of both will play out.”

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