The corn rally may have peaked on Sep. 18 after going six consecutive weeks of higher week-over-week closes. Fears over coronavirus resurgence in Europe, surpassing 200,000 deaths here in the U.S., and increased cases in the Midwest caused a sharp drop in the equities markets and selloffs in the commodity markets. After approaching $3.80 per bushel, corn futures have fallen off 17 cents as of Sep. 24’s close at $3.63 per bushel.
In addition to COVID-19’s pressure, corn harvest is officially underway and adding some weight on the market. In early harvest results, yields are coming in near or above current estimates.
Most-recent reported ethanol production averaged 906,000 barrels per day, still down 10 percent vs. a year ago. Gasoline demand has slowed down since Labor Day, as it typically does, with consumption over the last four weeks averaging 8.54 million barrels per day. This volume is 9.5 percent below usual levels, as suggested by weaker ethanol demand. Should this pace continue for the rest of 2020 and into 2021, corn use for ethanol could be up for further reductions.