Chicago Board of Trade Market News
Outlook: The market had been rising based on an extended hot weather forecast, despite consistent very good crop ratings (75 percent is good to excellent), but it has taken just four trading days this week to erase a majority of the corn contract’s spring gains.
The shift occurs as the growing season changes into its most critical period. If there is going to be a blast of yield-reducing dry heat, it is not going to occur during the coming week. However, the GFS and EU weather models do not agree much beyond that. Moreover, pollination will be occurring in about three weeks and that is when moisture is most critical. After that, it is just 20 more days to maturity. Because the season started with such high production estimates, it will not take much adversity to bring that number down.
Non-commercials had befuddled more cautious traders with their jump into very long positions, and this week they began to sell it off. However, this could be just the second directional change of a very dangerous whipsaw. One bullish piece is the possibility of another reduction in the size of the Brazilian corn crop. U.S. corn export inspections were in the middle of the expected range this week. Still, the state of play going forward is that feed wheat is now once again priced below corn, and it will start gaining market share.
Other than weather, the market is focused on the quarterly stocks and planted acre revision reports to be issued by USDA in one week. Soybeans continue to attract a better price, and this should show in the amount of corn that gets planted.
Finally, it should be noted that options on the July contract expire tomorrow (June 24).