+Info Corn is a member of the grass family of plants and is a native grain of the American continents. Fossils of corn pollen that are over 80,000 years old have been found in lake sediment under Mexico City. Archaeological discoveries show that cultivated corn existed in the southwestern U.S. for at least 3,000 years, indicating that the indigenous people of the region cultivated corn as a food crop long before the Europeans reached the New World. Corn is a hardy plant that grows in many different areas of the world. It can grow at altitudes as low as sea level and as high as 12,000 feet in the South American Andes Mountains. Corn can also grow in tropical climates that receive up to 400 inches of rainfall per year, or in areas that receive only 12 inches of rainfall per year. Corn is used primarily as livestock feed in the United States and the rest of the world. Other uses for corn are alcohol additives for gasoline, adhesives, corn oil for cooking and margarine, sweeteners, and as food for humans. Corn is the largest crop in the U.S., both in terms of the value of the crop and of the acres planted.

The largest futures market for corn is at the CME Group. Corn futures also trade at the Bolsa de Mercadorias & Futuros (BM&F) in Brazil, the Budapest Commodity Exchange, the Marche a Terme International de France (MATIF), the Mercado a Termino de Buenos Aires in Argentina, the Kanmon Commodity Exchange (KCE) in Korea, and the Tokyo Grain Exchange (TGE). The CME futures contract calls for the delivery of 5000 bushels of No. 2 yellow corn at par contract price, No. 1 yellow at 1-1/2 cents per bushel over the contract price, or No. 3 yellow at 1-1/2 cents per bushel below the contract price.

Prices - CME corn futures prices (Barchart.com electronic symbol code ZC) traded sideways to higher the first half of 2017 amid strong demand. The USDA projected U.S. 20161/7 corn exports would climb to a 9-year high of 2.225 billion bushels, while domestic corn demand was solid as U.S. ethanol production in late January 2017 rose to a record 1.061 million bpd. The upside in corn prices was limited in the first half of 2017 as the USDA projected a record global 2016/17 corn crop of 1067.21 MMT and record 2016/17 global corn ending stocks of 224.59 MMT. Corn prices climbed to the high for 2017 at $3.9450 a bushel in July as excessive heat and limited rain in the Midwest hurt U.S. corn crop conditions. The rally soon evaporated, and corn prices tumbled to their low for the year in August 2017 at $3.2850 a bushel as beneficial rains eased crop concerns and supplies increased. The USDA in its September WASDE report raised its projections for the global 2016/17 corn crop to a record 1071.23 MMT and record 2016/17 global corn ending stocks of 226.96 MMT. The downside for corn prices was limited, however, as the USDA also projected that global 2017/18 corn ending stocks would fall -10.8% to a 4-year low of 202.47 MMT. Corn prices stabilized and moved sideways into year-end. Projections of robust supplies limited the upside for corn prices after the USDA in the October 2017 WASDE report raised its 2017/18 corn production estimate to 14.28 billion bushels, the second-highest ever, and raised its U.S. 2017/18 corn ending stocks estimate to a record 2.34 billion bushels. Despite strength in demand, the 2017/18 U.S. corn stocks-to-use ratio of 16.8% was above the 10-year average of 11.4%, and the world stocks-to-use ratio of 19.1% was above the 10-year average of 18.2%. Increased U.S. ethanol production was supportive for corn prices and domestic demand as U.S. ethanol production in early December 2017 rose +3.9% to a new record high of 1.108 million bpd. Increased corn production in South America, however, prompted the USDA to raise its 2016/17 corn production estimate to a record 1075.55 MMT and raise its 2016/17 global corn ending stocks estimate to a record of 227.34 MMT. Corn prices finished 2017 down 0.5% at $3.5075 a bushel.

Supply - World production of corn in the 2017/18 marketing year is forecasted to fall -2.9% to 1.045 billion metric tons, down from the 2016-27 record high of 1.076 billion. The world's largest corn producers are forecasted to be the U.S. with 35.4% of world production, China with 20.7%, and Brazil with 9.1%. Production in both China and Brazil has more than tripled since 1980. Production in the U.S. over that same time frame has about doubled. The world area harvested with corn in 2017/18 are forecasted to fall -0.6% yr/yr to 321.7 million hectares, down from the 2014/15 three-decade high of 325.8 million hectares. World ending stocks of corn and coarse grains in 2017/18 fell -11.5% to 232.2 million metric tons.

U.S. corn production for the 2017/18 marketing year (Sep-Aug) is forecasted to fall -3.8% yr/yr to 14.578 billion bushels. U.S. farmers are forecasted to harvest 83.111million acres of corn for grain usage in 2017/18, which is down -4.2% yr/y. U.S. corn yield in 2017/18 is forecasted to rise +0.5% to 175.4 bushels per acre, which is a new record high. U.S. 2017/18 ending stocks are forecasted to rise by 2.0% to 2.340 billion bushels. The largest corn producing states in the U.S. in 2017 were Iowa with 17.4% of U.S. production, Illinois with 15.9%, Nebraska with 11.4%, Minnesota with 10.0%, and Indiana with 6.5%. The value of the U.S. corn crop in 2016/17 was $51.704 billion.

Demand - World consumption of corn and rough grains in the 2017/18 crop year is expected to fall -0.2% yr/yr to 1.354 billion metric tons, down from the 2014/15 record high of 1.277. The U.S. forecasted distribution table for corn shows that in 2017/18 the largest category of usage, aside from animal feed, is for ethanol production (alcohol fuel) with 5.475 billion bushels, which is 79.1% of total non-feed usage. That was down up +2.1% yr/yr. Corn usage for ethanol is more than eight times the usage in 2000. After ethanol, the largest non-feed usage categories are for high fructose corn syrup (HFCS) with 6.6% of U.S. usage, glucose and dextrose sugars with 5.3%, corn starch with 3.4%, cereal, and other corn products with 3.0%, and alcoholic beverages with 2.2%.

Trade - U.S. exports of corn in 2015/16 rose +9.4% to 51.135 million tons. The largest destination countries for U.S. corn exports are Mexico with 26.6% of total exports, Japan with 22%, South Korea with 7.6%, Mexico (27%), and Taiwan with 4.5%.

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