Corn caught between tight EU supply and booming Brazilian output

Corn prices remain under upward pressure, supported by strength in wheat and soybeans, high crude oil prices and harvest-delaying rains in the US, while structurally rising Brazilian production and already elevated Euronext levels cap the upside. EU supply losses, particularly in France, are driving import demand and reshaping trade flows in favour of the US and Ukraine. The current market is defined by a tight short‑term balance in Europe versus an increasingly comfortable medium‑term global outlook. On the one hand, drought‑hit EU crops and slow US harvest progress keep nearby prices supported and basis firm. On the other, Brazil is preparing a significant acreage and output expansion over the next two seasons, which, combined with growing export capacity, should limit sustained rallies. Merchants need to navigate this contrast: aggressive nearby demand in the EU versus the risk of heavier global supplies into 2025/26 and 2026/27.

Prices

CBOT corn futures advanced on Tuesday, helped by gains in wheat and soybeans and by the high level of crude oil prices, which improves the economics of corn-based ethanol. This aligns with recent quotes showing December 2026 CBOT corn trading modestly higher over the past sessions in US-cent terms, implying spot values around EUR 210–230/t after currency conversion.  

On Euronext, corn prices are already described as "very high", and recent quotes for French corn delivered Bordeaux around EUR 273/t confirm the elevated European level compared with Chicago. At the physical level, German feed corn EXW Drentwede is trading at about EUR 0.295/kg (EUR 295/t), while Ukrainian feed corn CPT Odesa is around EUR 0.172/kg (EUR 172/t), underlining the competitive edge of Black Sea origins into the EU.

Supply & Demand

In the US, the corn market is currently supported by expectations of abundant rainfall in the coming week in key producing states, which could slow down harvest progress and temporarily restrict producer selling. This weather delay comes on top of spillover strength from wheat and soybeans, reinforcing short-term tightness in available supplies.

In contrast, Brazilian fundamentals are turning increasingly bearish for the medium term. Conab has raised its 2025/26 corn crop estimate to 144 million t (USDA: 141 million t) and projects 148 million t for 2026/27, well above the current USDA outlook of 139 million t. The expansion is acreage-driven, with first-crop area in 2026/27 seen up 10.7% to 4.54 million ha, second-crop (safrinha) area up 3.7% to 18.48 million ha and total production split into roughly 32.1 million t (first crop), 113.2 million t (safrinha) and 2.6 million t (third crop).

This Brazilian growth is underpinned by rising domestic feed and corn ethanol demand and stronger export ambitions, with shipments potentially climbing to 46 million t. At the same time, the EU is moving in the opposite direction on the production side: France has cut its current-year corn harvest forecast from 9.0 million t to 8.1 million t, 42% below last season’s 13.9 million t due to heatwaves and drought. This takes French output to the lowest level in decades and removes a key intra-EU supply source.

The weak EU crop translates directly into higher import needs. By 13 September, EU corn imports had reached 4.01 million t, up 430,000 t within a week and 38% above the same period last season. Roughly half of these volumes (2.0 million t) have gone to Spain, followed by Italy (428,000 t), Portugal (424,000 t) and the Netherlands (410,000 t), while Germany has taken only 54,000 t so far.

Trade flows are also shifting in terms of origins. The US has become the largest supplier to the EU with 1.65 million t versus only 349,000 t a year earlier. Ukraine has also raised its shipments to 1.35 million t (previously 696,000 t), reflecting improved logistics and strong EU demand. In contrast, Brazilian deliveries into the EU have almost halved from 1.52 million t to 816,000 t, despite Brazil’s expanding crop, partly due to competition in other destinations and timing of export programmes.

Fundamentals

The combination of firm crude oil prices and robust demand from the corn ethanol industry keeps a solid floor under US corn, even as global harvest prospects improve. Oil strength increases the relative attractiveness of ethanol blending, thereby supporting corn usage in biofuels and linking corn more closely to energy market volatility. This linkage is a key risk factor for both flat price and crack spreads.

From a structural perspective, Brazil’s planned acreage expansion and rising export potential point to a looser global balance beyond 2025. If Conab’s higher output path materialises, Brazil alone could cover a large share of incremental world import demand, especially from the EU, Asia and the Middle East. In such a scenario, today’s weather- and logistics-driven price spikes risk attracting forward selling from Brazilian producers and traders, which would cap deferred futures.

In Europe, however, fundamentals are currently much tighter. The deep production shortfall in France and other regions, combined with still-rising import needs, explains the strong basis in physical markets like Germany and the premium of Euronext over Chicago. Nonetheless, the report also notes that at Euronext’s already high price level, further increases will be hard to pass through, suggesting that demand destruction in feed rations and substitution with cheaper wheat or barley could soon temper additional rallies.

Weather & Harvest Outlook

For the US Corn Belt, forecasts for the coming week indicate "abundant" rainfall in several core producing states. This pattern is likely to delay harvesting operations and potentially affect grain quality where fields are already saturated, but it also stretches out the arrival of new-crop supplies on the market, lending short-term support to futures and basis.

In Europe, the damage has largely already been done. The French ministry explicitly attributes the cut in its harvest forecast to earlier heatwaves and drought, and no late-season weather improvement can reverse the yield losses at this stage. Brazil’s outlook into 2025/26 and 2026/27 hinges more on acreage decisions and input costs than on any immediate weather issue; for now, the planning assumption is for normal conditions supporting the expanded area.

Trading outlook

• EU buyers: With Euronext and physical prices already elevated, consider staggered coverage rather than chasing rallies. Focus on Black Sea and US offers, which currently price well below German domestic values and could narrow basis as logistics normalise.
• Feed manufacturers: Evaluate partial substitution of corn with alternative cereals where technically feasible, especially in Western Europe, to mitigate high spot prices and protect margins until imports rebuild stocks.
• Producers (US/EU): Use current strength, driven by weather and energy, to layer in incremental forward sales for 2025, but maintain some open exposure given uncertainty about Brazil’s execution risks and potential further weather issues.
• Merchants & traders: Monitor the pace of EU imports from the US and Ukraine closely; any acceleration in Ukrainian export capacity or freight easing could quickly compress the European premium and pressure Euronext spreads.

3-day directional outlook (in EUR)

• CBOT-linked export values (US Gulf, FOB, EUR/t): Slightly firmer bias, tracking weather-related harvest delays and strong energy markets.
• Euronext corn futures (EUR/t): Sideways to mildly higher; upside limited by already high levels and expectations of stronger Brazilian competition ahead.
• Physical EU corn (DE EXW, ES/Central EU CIF, EUR/t): Firm with potential for further basis strength in deficit regions until additional US and Ukrainian cargoes arrive.