Price action: December corn futures surged 27 1/4 cents to $6.23 1/2, up 16 cents for the week and the contract’s highest closing price since June 29.
5-day outlook: The corn market came roaring back from a steep, post-July-4-holiday slump as December futures recovered from a five-month low at $5.66 1/2 posted Wednesday and ended with the contract’s first weekly gain in the past three. Price strength to a large degree reflected fund-driven corrective buying and bargain-hunting, with concern over an expected return of dry conditions to the Midwest beginning mid-July prompting traders to restore some weather premium to the market. USDA’s next weekly crop ratings Monday should indicate whether recent rains eased stress on crops. Earlier this week, USDA rated 64% of the corn crop either “good” or “excellent” as of Sunday, down from 67% in those categories and lower than trade expectations. USDA’s monthly Supply and Demand update Tuesday may include some small adjustments for the corn balance sheet.
For more crops and livestock analysis and forecasts, start a 1-month Pro Farmer trial subscription.
30-day outlook: Midwest weather and pollination progress will be key price drivers the rest of July, and near-term forecasts late this week suggested conditions may not be ideal in many areas. “A transition to drier weather and less favorable crop conditions will begin Saturday and will continue through at least July 22, and possibly deeper into the month,” World Weather Inc. said today. “Subsoil moisture should be high enough to prevent serious crop stress in much of the Midwest during the next 10 days, but some crops in areas that missed out on significant rain this week should soon see rising levels of stress. Pollinating corn will be most vulnerable to significant declines in yield potentials if drier weather were to persist deeper into the second half of the month.”
90-day outlook: Longer-term market factors include the Russia-Ukraine war and global financial markets, which have been roiled by growing concerns over recession and expectations for further aggressive rate increases from the Federal Reserve. The “inflation trade” faded recently as crude oil and other commodities tumbled, which could generate to pressure on grains, especially from speculators. Continuing signs of soft export demand could limit price upside. Early today, USDA reported net weekly corn sales reductions of 66,600 MT for 2021-22, a marketing-year low and well under trade expectations. Net sales for 2022-23 totaled 111,200 MT, down 36% from the average of 172,520 MT for the previous four weeks.
What to do: [this information is available to subscribers only - start a 1-month trial subscription for $1 ]
Hedgers: [this information is available to subscribers only - start a 1-month trial subscription for $1 ]
Cash-only marketers: [this information is available to subscribers only - start a 1-month trial subscription for $1 ]
