Corn Weakness Extending to Tuesday’s Midday

Corn prices are broadly lower, with nearby contracts down 1-4 cents and cash corn at $3.91. This occurs despite improved U.S. crop conditions, now 73% good/excellent and 8% silking, though planted acreage and June 1 stocks show mixed signals relative to estimates and prior year. Internationally, Ukraine's 2024/25 corn export forecast is significantly reduced to 22 MMT, while Brazil's production estimate rose to 136.1 MMT, even as its June export pace underperformed prior estimates.

Analysis

Corn prices are facing downward pressure, with nearby futures contracts declining 1 to 4 cents, driven primarily by favorable U.S. crop conditions. The USDA's Crop Progress report showed a notable improvement in ratings, rising 3 points to 73% good-to-excellent, with the Brugler500 index climbing 6 points to 382. This improved outlook is supported by crop development running ahead of schedule, with 8% silking versus the 6% average. However, the supply-side data presents a more complex picture. The USDA's quarterly stocks report indicated 4.643 billion bushels on June 1, which, while slightly above trade estimates, is down 354 million bushels year-over-year, suggesting tighter underlying supply. Furthermore, the 95.203 million planted acres reported were slightly below both March intentions and analyst estimates. The global outlook is also mixed; a substantial cut in Ukraine's 2024/25 export forecast to 22 MMT provides a bullish signal, but this is counteracted by StoneX's upward revision of Brazilian corn production to 136.1 MMT, which adds to potential global supply.

Key Decisions for Investors

• Given that current price weakness is primarily tied to strong U.S. crop conditions, investors should closely monitor upcoming 7-day weather forecasts, as the projected limited rainfall in parts of the Corn Belt could be a catalyst for a sentiment reversal.
• Consider the underlying bullish factors that the market may be discounting, specifically the year-over-year decline in U.S. corn stocks and the significant reduction in Ukraine's export forecast, which could provide price support in the medium term.
• Pay attention to the divergence in Brazilian data, where an increased production estimate from StoneX contrasts with a lower June export estimate from ANEC, as this could signal logistical constraints or shifting demand that will influence global trade flows.