Corn drops in reaction to escalating US-China tensions
- Bullish
- Global consumption remains strong;
- USDA estimates lower global stocks for the 2025/26 crop;
- Strengthened exports in the United States;
- Slow commercialization in Brazil and strong domestic consumption.
- Bearish
- Completion of Brazil's safrinha crop harvest;
- Record crop in the United States;
- Higher stocks in the United States.
Weekly Summary | Corn contracts fell to US¢413.00/bu last week. The first trading sessions of the week were more stable for corn. However, on Friday, escalating tensions between the US and China influenced losses for soybeans and global markets, which also resulted in pressure on the corn market. Additionally, the prospects of a possible negative adjustment in US domestic demand are growing stronger, although there is little clarity on the country's fundamentals due to the government shutdown, which will enter its second week in the coming days. During the shutdown, data such as WASDE and the export sales report remain suspended. Another bearish factor is the positive outlook for the Brazilian crop: weather conditions have been favorable for the first corn crop, and the good progress of soybean planting also suggests an appropriate planting window for the safrinha corn crop early next year.
Intraday (15 min) Dec/25 contract - CBOT
Source: CBOT. Prepared by: StoneX.
US-China Tensions | At the beginning of the month, the market became optimistic about the possibility of Trump and Xi Jinping meeting face-to-face at the end of October to discuss trade relations between the US and China. This prospect has garnered media attention as the Asian country, the world's largest soybean importer, has been avoiding American soybeans, resulting in strong bearish pressures, especially on the basis prices in the western part of the US soybean belt.
Although the soybean market has faced significant repercussions, the main focus is on rare earth metals, which are essential for the development of the technology sector and are predominantly sourced from China. Last week, Beijing imposed export restrictions on these materials, which could have a significant impact on the growth of the technology sector. Consequently, tensions in Washington have risen, with Trump stating that he is no longer interested in advancing negotiations with China in a context where the Asian country's economic policies remain contrary to American aspirations.
The worsening dialogue has pressured global markets, negatively affecting corn as well. Although China is not a major buyer of American corn, bearish forces on soybeans tend to resonate within the cereal market due to potential future shifts in planted areas if the US continues to face difficulties exporting soybeans. Additionally, increased trade tensions between the world's two largest economic powers are likely to strengthen the notion of slower economic growth, which adversely impacts commodity complex pricing.
Intraday (15 min) Sept/25 contract - B3
Source: B3. Prepared by: StoneX.
Brazil | Corn prices in Brazil went against the international trend, showing a significant appreciation on the B3, where the November futures contract ended the week trading at R$67.88 per bag (+2.8%).
Even though the international context is bearish and the outlook for the 2025/26 Brazilian crop remains positive, the market operates in response to a strong domestic demand. Additionally, exports have also performed well in recent weeks, closing September at 7.6 million tons, putting cumulative shipments ahead of last year's figures. Nevertheless, Brazil is expected to export slightly less than initially anticipated. Therefore, StoneX will likely revise its export figures for 2024/25 in the November estimate, which will also include the first surveys for the 2025/26 second corn crop.
Future contracts traded on CBOT (US¢/bu)
Source: CME. Prepared by: StoneX.
Future contracts traded on CBOT (US¢/bu)
Source: CME. Prepared by: StoneX.
Future contracts traded on B3 (R$/bag)
Source: B3. Prepared by: StoneX.
Spot prices in Brazil (USD/ 60kg bag)
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