The US corn balance sheet has swung sharply tighter over the summer as extreme heat in some parts of the Midwest and excessive rain in others cut yield potential while demand stayed strong, Farm Progress reports in its corn outlook.

In its 11 September supply and demand report, USDA cut its forecast for corn stocks at the end of the 2026-27 marketing year to 1.57 billion bushels, down 18% from 2025-26. That pushed the stocks-to-use ratio to 9.68%, below 10% for the first time in four years and the lowest since 2021-22. Put another way, the country will hold about 35 days of corn stocks at the end of next summer, against 44 days a year earlier.

The ratio measures expected ending stocks as a share of annual consumption; a falling number signals a thinner buffer against supply shocks and is strongly correlated with price volatility. A ratio below 10% has historically gone with steep futures rallies. In 2021-22, when it fell to 9.24%, corn futures reached a ten-year high above $8.24 a bushel, with Russia's invasion of Ukraine also a factor.

Some advisers think $6 corn is possible, but the article cautions against waiting too long as harvest accelerates. December futures have pulled back from a three-year high just under $5.50 in early September, and adviser Jon Scheve, owner of Scheve Grain, said that could prove a near-term peak if yields come in better than feared. USDA's separate production report cut the crop by 213 million bushels to 15.8 billion, down 7.2% from 2025 but still the second-largest harvest on record.

Longer-dated contracts such as March 2027, which touched $5.64 on 2 September, still have upside, Scheve said, but the market is vulnerable to a correction if speculators trim a record level of bullish bets. His advice for harvest: "I would sell any corn coming off the combine that you can't fit in the bin," since it can be sold now at or slightly above break-even, and leave what is stored at home to see what the market brings.

Source: Farm Progress