Corn Falling at Monday’s Midday

Corn futures are down 8 to 12 cents midday, with the national average cash price falling 11.5 cents to $4.095. Weekly export inspections totaled 1.673 MMT, up 21.16% year-over-year but down 3.23% from the previous week, with Japan, Mexico, and South Korea as top destinations. Speculators increased their net short position by 9,977 contracts, holding a net short of 164,020 contracts as of June 10th, while Brazil's second corn crop harvest lags last year's pace at 5.2% complete.

Analysis

The corn market is exhibiting significant downward pressure, evidenced by futures contracts falling 8 to 12 cents and the national average cash corn price declining 11.5 cents to $4.09 ½ per bushel. This bearish trend is mirrored in speculator sentiment, with CFTC data revealing an increase of 9,977 contracts in their net short position, reaching 164,020 contracts by June 10th. While USDA export inspections for the week ending June 12th reported 1.673 MMT shipped—a 21.16% year-over-year increase—this volume represented a 3.23% decrease from the prior week. However, cumulative marketing year shipments remain robust at 52.05 MMT, up 28.46% compared to the same period last year. Anticipated favorable weather, including recent and forecasted rainfall in the Corn Belt, is expected to support a slight improvement in corn condition ratings, with analysts projecting 72% in good/excellent condition. In contrast, Brazil's second crop corn harvest is notably behind schedule, at only 5.2% complete versus 21% at the same time last year, a potential longer-term supply-side concern that is currently being overshadowed by immediate bearish factors. The decline in crude oil prices, down $1.29 per barrel, may also be contributing to the negative sentiment in the corn market given corn's use in ethanol production.

Key Decisions for Investors

• Investors should monitor corn futures for continued price weakness given the prevailing bearish sentiment and increased net short positions held by speculators.
• The anticipated improvement in U.S. crop conditions due to favorable weather could exert further downward pressure on prices, potentially overshadowing the slower Brazilian harvest pace in the short term.
• Evaluate the dichotomy between strong year-over-year export demand and the recent weekly decline in shipments when considering adjustments to existing positions or initiating new ones.