Corn Futures Climb on Planting Delays and EU Tariff Tensions

Corn prices rose due to fund and technical buying, supported by concerns over planting delays in the Eastern Midwest following recent flooding. While it’s still early in the planting season, persistent wet conditions—possibly linked to La Niña patterns—could impact the total corn acreage in 2025. Analysts expect the USDA to lower U.S. ending stocks in its upcoming report. Meanwhile, the U.S. Energy Information Administration reported a seasonal dip in ethanol production, hitting a 10-week low, while domestic ethanol stocks and exports increased.

Tariff tensions are adding uncertainty to the corn trade. The USDA confirmed a surprising sale of 240,000 tonnes of U.S. corn to Spain for the 2024–25 marketing year, just ahead of the European Union’s implementation of a 25% import duty on U.S. corn.

The impending tariff is expected to significantly reduce U.S. corn exports to the EU, which has become a major buyer this season. From July 2024 to early April 2025, the EU imported 3.4 million tonnes of U.S. corn—up sharply from just 114,000 tonnes the previous year—as the U.S. became the EU’s second-largest supplier after Ukraine. With U.S. corn being the cheapest globally, EU buyers had taken advantage of favorable prices. However, after the tariffs take effect, buyers will likely turn to more expensive sources like Ukraine and Brazil, where prices could rise further before the next Brazilian crop arrives in July.

The European feed industry is bracing for higher costs, not supply shortages. Analysts estimate that importers may face $6–$7 more per tonne, while the European Feed Industry Association (FEFAC) warns tariffs could add €2 billion in costs. Spain has led EU purchases of U.S. corn, including the latest 240,000-tonne sale. While some relief comes from the exclusion of soymeal from the tariff list, concerns remain over the inclusion of the feed additive lysine and the impact of separate EU anti-dumping tariffs on Chinese lysine.

Although the EU also plans to impose tariffs on U.S. soybeans starting December 1, traders see this delay as an opportunity for ongoing negotiations and continued trade while China focuses on sourcing soybeans from Brazil.

Corn futures climbed on Wednesday, buoyed by a mix of geopolitical developments, weather concerns, and shifting ethanol production. The market responded strongly to President Trump’s announcement of a 90-day pause on newly imposed tariffs for most countries, excluding China. This news lifted CBOT May corn futures (CK25) by 5 cents to $4.74 per bushel, hitting their highest level since mid-March. Spot cash corn prices also rose, with the CmdtyView national average cash price up around 5 1/4 cents to $4.46 1/2.

Despite the short-term price boost, trade tensions with China have intensified, with Beijing retaliating by hiking tariffs on U.S. goods to 84%, significantly reducing China’s incentive to import American crops. This has particularly pressured corn and soybean markets, both of which saw earlier gains erased temporarily before rebounding late in the session.

On the ethanol front, the U.S. Energy Information Administration reported a decline in weekly ethanol output to a two-month low of 1.021 million barrels per day, even as inventories rose to 27.034 million barrels, indicating weakening demand. Ethanol exports nudged higher, but refinery blending inputs fell.

The USDA’s monthly WASDE report, due Thursday, is expected to show a 30 mbu cut to U.S. ending stocks, with estimates ranging widely from 1.405 to 1.605 billion bushels. South American crop projections may also be trimmed slightly, with Argentina’s estimate expected to decline by 0.7 MMT to 49.3 MMT, and Brazil’s down marginally to 125.91 MMT.

Meanwhile, weather conditions remain a concern, especially for U.S. farmers just beginning spring planting. Rain across parts of the Midwest and Delta is slowing progress. As of Sunday, only 2% of U.S. corn had been planted.

Despite bullish support from macro factors like a weaker U.S. dollar and stronger crude oil prices, demand uncertainties remain, especially as Asian buyers reduce U.S. grain purchases amid tariff-related risks. This, combined with a seasonal slowdown in export activity and ongoing geopolitical tensions, continues to inject volatility into the corn and broader grain markets.

Corn futures appear poised for continued short-term strength, supported by technical buying and persistent weather-related concerns. However, longer-term upside may be capped by demand risks stemming from escalating global tariff tensions. If planting delays persist through April and La Niña patterns intensify, prices could challenge resistance near $485–$490. Conversely, a stabilization in weather and resolution of trade uncertainties could trigger consolidation toward the $460 level.

Data for Technical Analysis (1H) CFD US Corn Futures - May 25 (ZCK5)

Resistance : 474.78, 474.93, 475.17

Support : 474.30, 474.15, 473.92         

1H Outlook   

Source: TradingView                                

Buy/Long 1 If the support at the price range 472.90 - 474.30 is touched, but the support at 474.30 cannot be broken, the TP may be set around 474.96 and the SL around 472.20, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 474.78 – 476.18, TP may be set around 476.40 and SL around 473.60, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 474.78 – 476.18 is touched, but the resistance at 474.78 cannot be broken, the TP may be set around 474.3 and the SL around 476.88, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 472.90 - 474.30, TP may be set around 472.40 and SL around 475.48, or up to the risk appetite.       

Pivot Points Apr 10, 2025 06:30AM GMT