Ethanol Production Strength Weighs on Corn Futures as Market Retreats

U.S. corn futures are trading in negative territory Wednesday, with contract losses ranging from 3 to 4 cents across the front-month positions as the market retreats from Tuesday’s advance. The national cash corn price, tracked by CmdtyView, declined 3 1/2 cents to settle at $3.99 per bushel.

Robust Ethanol Production Continues Supporting Demand

Recent EIA (Energy Information Administration) data reveals that ethanol production maintained strong momentum during the week ending December 5, reaching 1.105 million barrels per day. Though this figure represents a modest decline of 21,000 bpd compared to the previous week’s record levels, the sustained production volume underscores the sector’s resilience and its ongoing role as a significant demand driver for corn.

Ethanol inventory levels showed minimal movement, with stocks declining just 1,000 barrels to 22.51 million barrels during the same period. Refiner inputs of ethanol decreased by 6,000 bpd to 851,000 bpd, while export activity softened with shipments dropping 45,000 bpd to reach 125,000 bpd.

Positioning Shifts Signal Market Recalibration

CFTC positioning data from the week of November 4 indicated that corn speculators reduced their net short exposure by 17,990 contracts, bringing the total short position to 71,516 contracts. This adjustment reflects traders repositioning amid shifting market dynamics.

International demand for U.S. corn remained active overnight, with South Korean importers tendering for a combined 136,000 metric tons of corn. Taiwan separately sought 65,000 MT of corn in tender operations, highlighting sustained global interest in American supplies.

Futures Contract Overview

Corn futures across the contract spectrum posted similar declines:

• Dec 25 Corn: $4.37, down 3 3/4 cents
• Nearby Cash: $3.99, down 3 1/2 cents
• Mar 26 Corn: $4.44 1/2, down 3 1/2 cents
• May 26 Corn: $4.52 1/4, down 3 1/4 cents

The broad-based weakness across delivery months reflects consolidation following Tuesday’s gains, even as underlying fundamentals tied to robust ethanol production continue to support the market’s longer-term dynamics.