Corn Futures Hold Gains on Weather and Export Demand

Key Moments

Front-Month Corn Extends Early Tuesday Strength

Corn futures were trading 1 to 2 1/4 cents higher in early Tuesday action, building on sharp gains from the prior session. On Monday, nearby contracts finished near their session highs, rising 14 1/2 to 16 1/4 cents, while deferred contracts settled 8 to 10 1/2 cents firmer.

Short covering contributed to the move, with total open interest declining by 5,923 contracts, concentrated primarily in the first three listed months. Overnight, an additional 9 deliveries were issued against July corn.

In the cash market, the CmdtyView national average Cash Corn price increased by 15 cents to $4.08 3/4.

US Crop Progress and Condition Ratings Steady

The latest weekly Crop Progress report showed that 16% of the US corn crop was silking as of July 5, running 2 percentage points ahead of the 5-year average. The report also indicated that 3% of the crop had reached the dough stage.

Condition ratings for the national crop were unchanged, with 67% classified as good to excellent. The Brugler500 index, a composite measure of crop condition, also held steady at 371.

Weather Outlook: Rains in the North, Heat Ahead

The 7-day forecast indicated expected rainfall of 1 to 3 inches across portions of the Dakotas and Minnesota, primarily over the next several days. In the Eastern Corn Belt, projected precipitation totals ranged from one-half inch to 2 inches over the next week.

Parts of Iowa, Missouri, and Nebraska were projected to receive up to an inch of rain. The 8-14 day outlook pointed to warmer temperatures across the US, along with a drier zone developing in the central region of the country.

Export Inspections: Strong Year-to-Date Pace

Monday morning’s Export Inspections report showed corn export shipments of 1.642 MMT (64.63 million bushels) for the week ended 7/2. That total was 9.64% below the previous week but 4.98% higher than the same week a year earlier.

Mexico was the top destination at 557,071 MT, followed by Japan with 311,567 MT and Colombia with 221,783 MT. Cumulative marketing year shipments reached 70.57 MMT (2.778 billion bushels), running 24.87% ahead of the corresponding period last year.

Managed Money Trims Net Short Exposure

CFTC data, released one day later than usual due to the holiday, showed that managed money traders reduced their net short position in corn futures and options by 23,482 contracts as of June 30. The net short stood at 46,209 contracts at that time.

Price Snapshot: Futures and Cash Levels

Disclosure

On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.