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The US ag BRACE Industry has recently been squawking about a pollination problem with the 2025 US corn crop.
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We can ignore this group for the most part while focusing on what the market has been and continues to tell us about REAL fundamentals.
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Here we see, for whatever reason, some interest in US supply and demand next spring.
Does the 2025 US corn crop have a pollination problem? This seems to be the subject du jour with nearly every ag media outlet devoting as much time and space to the subject as possible. According to most of these media accounts, the US will be lucky to harvest one truckload of corn this fall, leaving the world in a crushing supply deficit while sending the market soaring to $42[i] per bushel[ii]. Now, if you believe all this, I have a mountain-top villa in south-central Kansas to sell you.
Why do I seem skeptical? After all, I’m no more an agronomist than I am an economist. But here’s the thing, many of the folks who are squawking about how the sky is falling in regard to the US corn crop couldn’t tell an ear of corn from a head of milo. Most of them are members in good standing of the BRACE[iii] Industry meaning they turn to whatever direction the USDA office is from them each morning and repeat their official mantra, “Everything is always bullish”. If it wasn’t a pollination problem it would be “not enough heat units”, or “it’s too hot”, or “it’s too wet”, or “it’s too dry”, or my favorite “the latest trade deals mean China is going to save US agriculture”. Huzzah! Huzzah!! Huzzah!!!
As a former long-time member of the ag media circus turned long-term investor, I’ve learned to ignore nearly all of what the industry has to say. It gives me a HIT[iv] advantage to listen to what the markets are saying rather than the cacophony screeching voices always present in the background.
Given all this, what is the corn market telling us in late July? As always, I’ll turn to our key reads on real market supply and demand: The National Corn Index[v], national average basis[vi], and futures spreads.
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The National Corn Index ($CNCI) was calculated near $3.85 last Friday putting it in the lower 20% of its 5-year price distribution range[vii]. Based on the economic law of Supply and Demand, this tells us spot cash supplies are large in relation to immediate demand.
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National average basis was calculated last Friday at roughly 14.5 cents under September futures and 34.0 cents under December. The previous 10-year average for last week was 14.75 cents under September with the previous 5-year (and 10-year) low weekly close for the first week of September at 30.0 cents under December.
