Direct answer: Corn prices are driven mainly by U.S. and South American crop weather, demand from ethanol and livestock feed, the export pace, and the supply-and-demand balance in USDA's monthly WASDE report. Chicago corn (ZC) is the benchmark futures contract. For Prairie farmers, the corn close also feeds into feed-barley and feed-wheat bids, even though Canada is not a large corn-futures market.
The crop: U.S. weather first, then South America
The United States is the world's largest corn producer and a major exporter, so Midwest planting, pollination and harvest weather are the classic drivers of CBOT corn futures. Heat or dryness around pollination is when a U.S. weather market is usually most intense. A larger-than-expected U.S. crop, or a comfortable harvest, typically weighs on the board.
Brazil and Argentina then take the seasonal lead. Brazil's second-crop (safrinha) corn and the Argentine crop compete with U.S. corn in export markets. Drought or harvest delays in South America can tighten the world balance well after the U.S. crop is made; a large South American crop can cap Chicago even when the U.S. story looks supportive.
USDA records country-level production, use and trade in the WASDE and the Foreign Agricultural Service PSD database. For Canadian acreage and production, Statistics Canada and Agriculture and Agri-Food Canada's principal field crops outlook are the official domestic sources.
Ethanol, feed and exports
U.S. corn demand has three large channels, and a change in any of them moves the balance sheet:
Ethanol: a major U.S. end use. Fuel-blending rules, gasoline demand and ethanol plant margins affect how much corn those plants bid for. The U.S. Energy Information Administration's Short-Term Energy Outlook is a regular official read on the fuel side.
Feed: livestock and poultry use corn as a staple ration. A large animal inventory supports feed demand; a liquidation or a shift into other feed grains works the other way.
Exports: weekly U.S. export sales show how competitive U.S. corn is against South America and other origins. A strong sales pace supports the board; a stall, or a large competitor crop, weighs on it.
The WASDE and the reports in between
The monthly WASDE is the main official reset of U.S. and world corn supply, use and ending stocks. Traders watch the carryout in particular: a larger stock figure typically weighs on prices, a smaller one supports them. Between WASDE releases, USDA acreage, crop progress, Grain Stocks and weekly export sales fill in the picture. The Daily Board's primer is What Is the WASDE Report?.
The U.S. dollar also matters, because export corn is priced in dollars. A stronger dollar can make U.S. corn less competitive abroad; a weaker one can support exports. Fund positioning, reported in the CFTC Commitments of Traders report, can stretch a move once it starts.
What Chicago corn means on the Prairies
Canada does not have a liquid corn futures contract of its own, but Chicago corn still shows up in Prairie feed markets. Imported U.S. corn competes with Alberta feed barley and with feed wheat, so a sharp move in Chicago can change what feedlots will pay for those local grains. The Daily Board's barley primer is How Are Alberta Feed Barley Prices Quoted?.
A local cash bid is still futures plus or minus basis, not the Chicago close itself. Harvest pressure, freight and the Canadian dollar can all move the cash price away from the board. See How Does the Canadian Dollar Affect Canola and Grain Prices?.
Frequently asked questions
What is the biggest regular driver of corn prices?
U.S. crop weather during the growing season, then the size of the South American crop. Ethanol, feed and export demand set how much of that crop the market needs, and the WASDE puts the balance on one page.
Why does South American weather move Chicago corn?
Brazil and Argentina are major exporters. When their crops look large, they compete with U.S. corn for the same buyers and can cap Chicago. A short South American crop tightens the world balance and can lift the board after the U.S. harvest.
How does ethanol affect corn?
Ethanol is a major U.S. use of corn. Changes in fuel demand, blending rules or plant margins change how much corn those plants buy, which shows up in the WASDE use numbers and can move futures.
Why does corn matter for Prairie feed barley?
U.S. corn is an alternative feed grain. When Chicago corn is cheap enough, after freight and the exchange rate, it competes with Alberta feed barley and can pressure local barley bids.
See also Corn Market Guide, Grain Prices Today, and What Is the WASDE Report?.
