Price action: July corn futures settled 2 1/2 cents lower to $4.46 1/4, the lowest close since April 19 and down 18 1/2 cents on the week.
5-day outlook: Corn futures closed lower each day this week in the biggest weekly loss since last July on the continuation chart. A portion of this week’s selling pressure can likely be attributed to long-term fundamentals that are ultimately bearish for the corn market as short-term bullishness from a moderately wet planting season has worn off. Prices are now trending lower on the daily bar chart, confirmed with the lower high made on Tuesday and the lower low today. Prices also formed a bearish head and shoulders pattern on the daily chart over the course of the month of May, which is also breaking down technically and has a target around $4.30. While the medium-term technicals and long-term fundamentals remain bearish, some profit-taking and corrective buying is possible next week as corn is short-term oversold, which could be price supportive in the coming week, but bulls are facing more of an uphill battle from hereon.
30-day outlook: While April and May rains caused moderate planting delays throughout the Corn Belt, that rain ultimately lifted soil moisture across the Midwest and negated much of the drought seen in the past few years. Rain is expected to persist through mid-week next week before a period of drier weather, though that pushes much of the Corn Belt beyond the final crop insurance dates. Still, producers are likely to finish out their planned corn acres. Many analysts anticipated corn acres were understated in the March Prospective Plantings Report, the relative wetness slowing fieldwork is likely to mitigate any expected increase in corn acres, but the increase in subsoil moisture could attract growers to continue planting corn despite the ideal window passing. That could lead to a volatile June Acreage Report at the end of the month, as analysts expectations are likely to vary widely.
90-day outlook: Only six years since 1981 have not seen a summer rally in corn futures, as noted in this week’s Pro Farmer Newsletter. The most common time for a rally to start is June, though June maintains a bearish seasonal, which ultimately points to June being a common time for corn prices to bottom and post a rally that lasts into July. While the long-term fundamental outlook remains bearish, a summer rally could still occur to give opportunities to advance sales. As mentioned above, the June Acreage Report will give a better idea of just how many acres were planted as well, enhancing clarity around the new-crop balance sheet.
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