Price action: July corn futures settled 4 3/4 cents lower to $4.35, marking a 15-cent loss on the week.
5-day outlook: One of the largest catalysts in the summer agricultural commodity markets is next week, as USDA updates planted acreage and the stocks report gives an inside look to use in the third quarter of the marketing year. That is likely to drive trade after that mark with continued downtrend and positioning likely ahead of that. Corn acres are likely to see an increase from March intentions, with that idea likely being the consensus among analysts ahead of the report, though estimates will be out early next week to affirm that claim. As noted in this week’s Pro Farmer Newsletter, even years that run moderately below average in terms of planting pace tend to see an increase in acres from the March Prospective Plantings Report. Given the large drop in corn acres and increase in soybean acres year-over-year, we feel this year is no different and an increase in acres is likely. Expect limited volatility heading into Friday’s reports, though some continued selling pressure is possible.
30-day outlook: Once next week’s reports are in the rear-view mirror and the July contract is off the board, attention will be turned heavily towards new-crop and weather. After moderately slow planting much of the spring, progress caught up throughout the Corn Belt. Recent rains in the upper Corn Belt have caused flooding and could drown out some crops. Meanwhile, parts of the eastern Corn Belt are seeing little rain and heat stress is beginning to weigh heavily on crops. While precip was abundant throughout the spring, rains have dried up and crop stress is returning. The longer-term outlook calls for above average temperatures and equal chances of precip throughout the Midwest. Weather is likely to drive price action after next week and the opportunity for a summer rally is still out there.
90-day outlook: Demand prospects have tightened the balance sheet in recent months as lower prices have brought additional demand from ethanol and exports, with USDA likely indicating heightened feed use as well next week. While demand has improved, it has not offset heightened production and it will take a significant bump in demand (or decrease in production) to tighten the balance sheet year-over-year. China has yet to make initial purchases for 2024-25 for any crop aside from wheat. China imports a significant amount of U.S. corn historically, even if they are not the main buyer of U.S. grain. The widening of the balance sheet is likely to continue to weigh heavily on corn prices barring any significant shift in production.
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