Price action: December corn futures fell 12 1/4 cents, before settling at $5.21, ultimately falling 15 1/4 cents on the week.
5-day outlook: Corn futures succumbed to selling pressure all week following Monday’s explosion higher, despite no real shift in the fundamental situation over the course of the week. The technical posture has shifted significantly with December futures breaking a two-week uptrend on the daily bar chart. The second summer rally of the year is still intact, though much further selling would threaten that claim. The technical breakdown could lead to further selling over the course of the next week, but with corn prices falling over 40 cents from Monday’s peak, prices could find some support and face balanced trade. The situation in the Black Sea has not changed and could quickly spark another rally in futures prices if turmoil persists, though a renewed Black Sea grain deal could just as quickly ignite further selling.
30-day outlook: Weather is going to remain a key market driver over the coming month. Hot and dry conditions have pressured crops over the past week, which is likely to continue over the next week, though rain is expected to move into the Corn Belt after the calendar turns to August. Some timely rain is expected to come into the Midwest over the next ten days, easing dryness in localized areas. The northern Plains and upper Midwest are expected to remain dry, heightening crop stress in the eastern Dakotas and Minnesota. The USDA is also set to release an updated yield forecast in the August 11 report, which will provide insight into production prospects, alongside the Pro Farmer Crop Tour taking place at the end of August, which will give key insight into Corn Belt production potential.
90-day outlook: While soybeans have been the subject of a spurt in daily sales, corn has not seen such demand. Ethanol demand remains below levels needed to hit the current USDA estimate. Weakened demand will lead to the ultimate expansion of the balance sheet from 2021/22, leading to the third year in a row with higher ending stocks. Even with a reduction in yield for 2023/24, the balance sheet is seen as expanding well beyond 2 billion bushels for the first time since 2018/19. This will continue to weigh on prices over the next three months, especially if poor weather conditions have not negatively impacted yield as much as analysts believe.
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