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The Corn & Ethanol Report

Daniel Flynn
http://www.pricegroup.com/
dflynn@pricegroup.com


Oversupply Not Shortages Concerns Global Grains. The Corn & Ethanol Report 02/11/2026

We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings MoM & YoY, Participation Rate, Average Weekly Hours, Government Payrolls, Manufacturing Payrolls, Nonfarm Payrolls Private, and U-6 Employment Rate at 7:30 A.M., Fed Bowman Speech at 9:15 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., 10-Year Note Auction at 12:00 P.M., Monthly Budget Statement at 1:00 P.M., and Fed Logan Speech at 6:00 A.M.

The Highlights slide from the Agriculture Secretary’s Briefing summarized the February WASDE report, which was uneventful. There were no changes of any significance in any of the US or world crop balance sheets. The largest change was a modest increase in the Brazilian soybean crop due to slight increases in area and yield. Global wheat supplies were fractionally tighter, as were US corn stocks due to slight increases in US exports. But the key take away from the report was that world is well supplied with principal grains and oilseeds, which is unlikely to change anytime soon.

South American Weather Pattern Update

Needed Drier Pattern Ahead for Mato Grosso; Moisture Rejuvination Persists in Argentina/Southern Brazil:

The South American pattern in late Feb remains favorable. Timely soaking rainfall in central and northern Argentina will work to improve vegetation health & crop ratings there, while key areas of northern Brazil get a temporary respite from ongoing tropical showers. South America will make it to the early part of March without new supply threats, and the Brazilian domestic market is soon to be inundated with new crop supply. Mato Grosso bt Feb 21st is forecast to harvest 1.3-1.4 Bil Bu of soy. Well above normal rainfall persists in Argentina and far southern Brazil. Rainfall of just .75-1.50” is offered to Mato Grosso, Mato Grosso do Sul, and Goias in the 6-10 day period, which implies increased open windows for harvest and safrinha corn seeding in mid-Feb

Analysis of USDA’s February WASDE

\US corn exports were hiked another 100 Mil Bu to 3,300 Mil Bu. Pace analysis to date was cited. Ag Resources (ARC) has no major disagreement with USDA’s export forecast, but maintains the market stays defined by oversupply. CBOT corn’s muted reaction to USDA’s Feb adjustment is telling and implies there’s ample room in the balance sheet for record – by far – export disappearance. It remains that there’s no threat to final end stocks below 2.0 Bil Bu, and ARC’s concern is that ultimately domestic consumption is trimmed by 200-300 Mil Bu, which pushes end stocks upward to 2.6 Bil. The longer-term issues is US corn end stocks will be unchanged in 26/27 – whether USDA’s forecast or ARC’s – without a loss of *+ Mil acres or a national yield below 177 BPA. The burden of rallies lies squarely in the hands of Mother Nature in 2026. A second lingering issue for corn is the degree to which US and exporter balance sheets must be adjusted to push fair value to or above $4.60/Bu or below $3.90. The relationship between US corn stocks/use and season average cash prices since the ethanol era emerged in 2006. The flat nature of the stocks/use vs. Price curve when supplies are abundant. Actual or perceived US corn end stocks must exist below 1.6 Bil Buto to prod spot CBOT futures above $4.60,and this requires a national yield below 174 BPA, which in tun requires outright drought. Be prepared for the market to be stuck in a range of $3.90-$4.40, basis spot CBOT, throughout 2026 unless weather is considerably dive in Brazil in April or in the US in Jul-Aug. Rallies will continued to be used to leverage downside risk. USDA left its South American balance sheets completely unchanged. Argentine yield data will be available by mid-March.

Have A Great Trading Day!



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