Corn futures slumped nearly 5%, as weather fears in the US recede.
Weekly corn crop ratings from the US Department of Agriculture was better than expected, underlining the fact that the harvest is getting ever closer and significant damage has yet to manifest.
“The big thing is we’re getting close to pollination,” Iowa-based broker Don Roose told Agrimoney, noting that the risk of heat and dryness stress during the crucial period is receding.
Condition better than expected
Data out after the Chicago session closed on Monday showed the condition of the US corn crop was seen unchanged, at 75% good or excellent, despite dry weather las week.
“This is 1 point off of our all-time record for this date,” noted Mr Roose.
And with weather prospects improving, the danger that corn will be stressed before its pollination period is receded.
“The pattern you have now is cooler and a little wetter,” Mr Roose said.
Weather story improves
Terry Reilly, at Futures International, agreed that “the crop weather story is improving”.
“The US weather outlook this morning was little changed from what we had yesterday,” he said.
“But what that does is verify the wetter outlook than we had last week.”
“This includes rains for Southern Iowa and Missouri which were areas which the market had been particularly worried about regarding dryness,” Mr Reilly said.
And Mr Reilly noted technical pressure on front month corn prices as well.
“We are approaching the 50-day moving average. If we touch it, or trade below it, that is a bearish pattern”.
And the looming expiry of July option will cap any rallies, as there has been heavy buying of options at $4.
July corn futures were trading down 4.8%, at $4.01 a bushel.
(Source – http://www.agrimoney.com/news/chicago-corn-prices-slump-as-weather-fears-ease–9678.html)