Chicago Board of Trade Market News
Outlook: This week started off with the price of corn futures contracts becoming modestly firmer. However, speculative traders who held short positions attempted to quickly squash any rebound that could cause technical indicators of a transition to neutral or bullish. They, in turn, attempted to shove the nearby July contract below $3.60 per bushel, but each attempt proved unsuccessful as global end-users were willing to buy at current price levels. In the longer run, aggressive selling by speculators at current low price levels could end up being be a sacrifice to win a battle that costs the war.
Weather premiums have largely been removed from the pricing within corn futures contracts. The July contract could sell-off another 10-20 cents in the next month if weather throughout the northern hemisphere is forecast to be favorable through the middle of July and the weekly crop conditions that are reported by USDA are comparable to last season (USDA will start reporting crop conditions after the Memorial Day weekend). If there is significant deterioration in weather and corn crop conditions, then there is likely to be a sudden and sizable increase in feed grain prices above present levels.