Price action: December corn futures fell 10 cents to $5.36 1/4, though prices still gained 22 1/2 cents on the week.
5-day outlook: December corn futures fell under pressure once again as price retraces Wednesday gains despite ongoing tension in Ukraine. Despite a near 30-cent retreat from Wednesday’s high, almost all price action has remained within Wednesday’s session. An uptrend remains on the daily bar chart and the recent uptrend is likely going to continue over the next week. Geopolitical tensions remain high, and any catalyst could send corn prices soaring. Until there is more clarity on a potential new grain deal or worries cease over shipping grains out of the Black Sea, some risk premium is likely to remain in corn prices.
30-day outlook: Weather is expected to turn hot and dry into the first week of August. Declines in soil moisture are expected and some crop stress will return, not helped by increasing temperatures that will lead to additional evaporation. It is still unclear how much the extensive dryness throughout early summer will have an effect on crops, but the current recovery in crop conditions likely points to the USDA leaving their forecast for yield unchanged in next month’s WASDE, barring any significant stress in the next couple of weeks.
90-day outlook: Once geopolitical tensions ease and production prospects are better realized, attention will turn back to the balance sheet. The 2022-23 marketing year is expected to have ending stocks at 1.43 billion bushels, the highest level since 2019-20. Exports are the lowest since 2012-13 and weekly sales have not been promising. The new crop balance sheet is not much better, with our ending stocks forecast at 2.22 billion bushels, the highest since 2018-19. The continued impact of Brazilian corn taking market share and reduced Chinese demand will likely weigh on prices in the medium term, barring any significant changes in the meantime.
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