Chicago Corn's 50-Year Streak Under Pressure: Why Prices Are Stuck—and What’s Next

The price of Chicago corn futures has hovered near $4.65 per bushel since early 2024, defying expectations of a surge despite historically tight supply conditions. Analyst Karen Braun of Reuters highlights a stark paradox: while the USDA projects the 2024-25 corn stocks-to-use (SU) ratio at 9.6%—the lowest since 2022-23—the current price lags far behind historical levels that once matched such tightness. This stagnation has left traders wondering: Can corn finally break its 50-year streak of underperformance, or are structural headwinds keeping it anchored?

The Supply-Demand Tightrope

The SU ratio, a key metric of supply-demand balance, paints a clear picture of scarcity. At 9.6%, this year’s SU mirrors levels seen in 2022 and 2023, when adjusted for inflation, corn prices averaged over $8 per bushel. Yet today’s price is just $4.65, suggesting a significant divergence. Braun argues this gap reflects broader market dynamics:

1. Global Competition: Brazil’s record corn harvest—projected at 145 million metric tons in 2024-25—and Argentina’s rebound from drought are flooding global markets. While U.S. exports remain robust (2.55 billion bushels in 2024-25), buyers now have cheaper alternatives.
2. Speculative Underperformance: Managed money’s net long positions in corn futures fell to 332,389 contracts by February 2025, down from two-year highs. Speculators added only 100,000 longs year-over-year, far below the enthusiasm seen in 2022.
3. Weather Risks: U.S. corn planting progress hit 24% by April 27, ahead of the 12% five-year average. But NOAA forecasts predict dry conditions in the eastern Corn Belt, which could delay planting and trigger a rally if fields miss optimal windows.

Bulls vs. Bears: Catalysts for a Breakout or Collapse

The May 10 USDA WASDE report looms as a critical inflection point. Analysts expect revisions to acreage (93–94 million), yield (180–181 bushels/acre), and ending stocks (2.1–2.2 billion bushels). Here’s how the numbers could swing prices:

• Bullish Scenario: A planting delay, a cut in U.S. acreage, or a Brazilian logistical bottleneck (e.g., port congestion) could push prices toward $5. A yield drop to 178 bushels/acre would add 15–20 cents to prices.
• Neutral Scenario: Rapid planting and ideal weather might keep prices in a $4.65–$4.85 range, sustained by the USDA’s May–July seasonal rally (historically averaging +91 cents).
• Bearish Scenario: A smooth harvest in Brazil, a higher-than-expected U.S. yield, or China’s retaliatory tariffs (34% on U.S. goods) could drag prices to $4.30.

The 50-Year Streak: Why History Matters

Corn prices have oscillated in a $3–$6 range since 1970, with only brief spikes above $7 (e.g., 2012 drought, 2022 geopolitical tensions). The current SU ratio of 9.6% has historically correlated with prices $2–$3 higher than today’s level. For example:
- In 2022 (SU 9.7%), inflation-adjusted prices averaged $8.40.
- In 2012 (SU 8.9%), prices hit a record $8.43 due to Midwest drought.

Trading the Stalemate

Traders are split between patience and caution:
- Bulls: Focus on weather risks and the May–July rally. A break above $4.80 (resistance level) could trigger momentum buying.
- Bears: Monitor Brazil’s export logistics and U.S. planting progress. A 40% planted acreage by May 15 (vs. the 60% average) would signal stress.
- Hedgers: Lock in 25–50% of expected production between Mother’s Day and Father’s Day, using put options to protect against post-rally dips.

Conclusion: The Tipping Point

Chicago corn sits at a crossroads. While supply tightness argues for higher prices, global competition and speculative apathy keep it anchored. A $5 breakout requires multiple catalysts: delayed planting, Brazilian logjams, and a bullish WASDE report. Conversely, a smooth harvest and falling fertilizer costs (a 22% input cost for corn) could cement the $4.30–$4.85 range.

Historically, May has been kind to corn: since 1990, prices hit their annual high post-February in 90% of years. With the SU ratio at decade lows and traders underexposed, 2025 could finally end the 50-year underperformance streak—if the weather cooperates.

Investors should watch the May WASDE report closely and price action around $4.80. For now, the corn market remains a waiting game, balancing hope for a breakout against the ghosts of past stagnation.