Chicago Board of Trade Market News
Outlook: The July corn contract had followed expectations by opening higher at the beginning of this week, but it stalled on the prospect that corn planting will occur in a more timely manner. By mid-week, corn contracts gave back gains and made charts look decidely more bearish. This section noted last week that corn contracts could be initially supported to higher, down the proceeding couple of weeks and then supported once again prior to pollination. That continues to remain the most likely price action.
A majority of U.S. corn planting is likely to happen by the middle of May, and that could temper the market’s perception about the size of the necessary weather premium. Of course, constrained weather concerns does not mean eliminated weather concerns. Some concern will remain and will likely rebound to a certain degree prior to pollination. There will presumably also be increased discussions about the prospect of El Nino deveoloping, but such a development half way through the summer will not be much of a real issue. One potential negative would be the prospect for excessive moisture in the fall during harvest.
The variability of regional weather throughout the Corn Belt is somewhat evident in the fact that the planting rate in Illinois is in line with the five-year average at 32 percent complete while the states on either side lag behind. Iowa to the west was reported to be 15 percent complete, in comparison to 33 percent normal, and Indiana to the east was reported as 8 percent complete, in comparison to 26 percent normal. A potential positive of having some variability in the planting pace across the Corn Belt is that there is a broader window for pollination to occur and that lessens the threat that a single 10-day period of heat could decimate the entire crop.