The December/July Corn Spread

This month USDA tightened the US 2024/25 crop year US corn supply/usage outlook by reducing the 2024 corn yield estimate. Historically the December – July (old crop new crop) corn spread has been largely a function of the old crop US corn carryover to old crop corn usage. We have found the ratio of the old crop carryout to food + corn used in fuels + corn exported provides the highest correlation to the historical spread data. 

The USDA’s January WASDE report data resulted in a 16% carryout to select usage ratio. The USDA’s current old crop corn S/D data suggests a 10 cent to 75 cent premium for July 2025 corn  over December 2025 corn futures. The forecast range would widen in favor of the July contract if USDA tightens the S/D projection still further this winter or spring. On 01/16/2025 the December 2025 July 2025 corn spread was trading at  34 cents premium the July contract.