Corn Under Pressure: China Cuts Feed Use While Ethanol and Alternatives Rise

China’s sharp reduction in corn use in feed rations is capping upside for global demand, even as US ethanol and Southeast Asian consumption provide support. Nearby futures on Euronext and CBOT are broadly steady to slightly softer, while physical corn in Europe and the Black Sea is holding within a narrow range. Corn markets are currently torn between weaker structural demand in China, short‑term supply relief in Indonesia, and firm feed costs in Vietnam. Substitution with wheat, barley, sorghum and even broken rice is diluting corn’s share in global feed, but US industrial use – especially for fuel ethanol – continues to underpin the market. At the same time, new European research confirming the climatic advantages of sorghum adds a longer‑term challenge to corn’s dominance in feed rations.

Prices

Euronext corn futures are stable, with Nov 2026 last at 276.00 EUR/t and Mar 2027 at 272.00 EUR/t. The forward curve then trends modestly lower towards Nov 2027 at 233.00 EUR/t, indicating expectations of comfortable medium‑term supply.

On CBOT, the nearby Dec 2026 contract trades around 501.25 US‑cents/bu, with a mild contango out to Mar 2028 at 532.50 US‑cents/bu, reflecting adequate US stocks and only modest demand growth. Chinese DCE corn futures for Nov 2026 are flat at 2,185 CNY/t, pointing to a balanced but not tight domestic market.

Physical indications corroborate this picture of contained but firm values. In Germany, feed‑grade corn EXW Drentwede was quoted at 0.289 EUR/kg on 6 October 2026, slightly above 0.287 EUR/kg the day before. Ukrainian feed‑grade corn CPT Odesa stands at 0.160 EUR/kg (5 October 2026), while FOB yellow corn from Paris is at 0.270 EUR/kg (24 September 2026).

Supply & Demand

China has markedly reduced the share of corn in feed rations in marketing year 2026/27, with the corn proportion falling from 47% in January to 29% in August. Hog sector losses and sow herd liquidation are depressing feed demand, pushing producers towards cheaper alternatives such as wheat, barley, sorghum and imported broken rice. As a result, the latest FAS estimate for China’s corn consumption was cut by 1 million tonnes to 322 million tonnes, while wheat consumption was raised by 2 million tonnes to 150 million tonnes.

In contrast, US domestic processing is providing solid support. Corn use in August reached 528 million bushels, up 4% year‑on‑year, with 478 million bushels going into fuel ethanol, also 4% higher than last year. This robust grind yielded 1.85 million tonnes of DDGS and 1.28 million tonnes of other co‑products, both up 5%, reinforcing corn’s embedded role in the US biofuel and feed complexes. Weekly US fuel ethanol input data for August and September likewise show high utilization rates between roughly 915 and 940 thousand barrels per day, underscoring persistent industrial demand. turn0search5

Indonesia, a key regional importer, harvested 11.86 million tonnes of corn in January–August 2026, 3.84% more than a year earlier on a 2.21% larger harvested area. August output alone reached 1.74 million tonnes, up almost 25% year‑on‑year, temporarily easing import needs. However, the statistical office projects September–November production at about 3.49 million tonnes, 5.49% below the same period of 2025, implying tighter domestic feed supplies towards year‑end and a potential rebound in import demand. turn0search2 turn0search6

In Vietnam, major feed manufacturers have announced their second round of price hikes in less than a month. From 1 October, large players are lifting prices by 11–15 USD/t after an earlier increase of around 8 USD/t in early September. According to FAO, international cereal prices rose 2.2% month‑on‑month in August, with corn up 2.5%, driven by worries over US and EU yields and firm feed demand. As Vietnam imports more than 65% of its feed ingredients, higher global corn costs translate quickly into domestic feed inflation. turn0search1

Fundamentals & Substitution

Corn’s share in global feed rations faces rising competitive pressure. In China, the switch to wheat, barley, sorghum and broken rice is a clear response to profitability stress in pig farming and elevated feed costs. This substitution effect, if sustained, could cap growth in global corn import demand even if protein meal and total feed output recover later in the season.

In Europe, a new study by INRAE and AgroParisTech highlights sorghum’s growing potential as a climate‑resilient alternative to corn. Average European sorghum yields could increase from around 3.0 to 3.4–3.8 tonnes/ha, while the area suitable for stable sorghum cultivation could expand from roughly 22% to 29–34% of arable land. Currently, sorghum occupies only about 0.1% of European cropland, yet modelling suggests that including sorghum at least once every three years in crop rotations could replace up to 90% of maize used in European livestock feed. Sorghum’s greater tolerance to heat and water stress strengthens the case for gradual structural substitution away from corn in drought‑prone regions. turn0search3

At the same time, corn retains key advantages in established value chains, particularly in the US ethanol sector. August data show that higher corn grind for ethanol is generating increased volumes of DDGS and other co‑products, which precisely target feed demand even as whole‑grain corn loses ground in some rations. This integration of fuel and feed markets helps stabilize corn demand despite regional shifts in direct feed use.

Weather & Regional Outlook

In the short term, weather is less dominant than demand‑side shifts, but it remains a background risk. Recent European production shortfalls and lower EU maize yields highlighted corn’s vulnerability to heat and drought, giving further momentum to sorghum’s appeal as a lower‑water alternative. In Southeast Asia, normal to slightly wetter‑than‑average conditions in parts of Indonesia should help late corn crops, but projected output for September–November still lags last year, keeping the regional balance finely poised. turn0search2 turn0search6

Trading Outlook

• Feed buyers (EU & Black Sea): Consider layering in nearby coverage while Euronext futures hover around 276.00 EUR/t and physical offers in Germany (0.289 EUR/kg EXW) and Ukraine (0.160 EUR/kg CPT Odesa) remain contained. Substitution into wheat and sorghum may limit upside but also reduce available top‑quality corn later in the season.
• Producers (EU): With the forward curve softening towards 233.00 EUR/t for Nov 2027, incremental hedging on rallies appears prudent, especially in regions where sorghum or other cereals can compete directly in feed rations.
• Importers (Southeast Asia): Indonesia’s temporarily higher output suggests patience on nearby purchases, but the expected year‑end production dip and ongoing Vietnamese feed‑price inflation argue for securing Q1 2027 coverage on price setbacks.

3‑Day Price Indications

• Euronext (Paris): Nov 2026 corn is likely to track sideways around current levels near 276.00 EUR/t, with modest downside bias if harvest pressure intensifies.
• CBOT (Chicago): Dec 2026 futures around 501.25 US‑cents/bu are expected to remain range‑bound, with macro sentiment and US harvest data the key short‑term drivers.
• Physical EU/Black Sea: German EXW and Ukrainian CPT/FOB quotations are seen staying broadly stable over the next three days, with freight and currency moves posing more risk than underlying fundamentals.