Corn opened solidly last night and led the way throughout the overnight session, with the spot July contract at a seven-week high and the new-crop Dec testing last week’s top; that’s despite bearish stocks gains on Friday and a generally favorable weather forecast? The bears will certainly need to see corn ratings steady out this afternoon after a plunge last week.
Weekend rains were scattered throughout the Plains and belt as expected, with the lightest amounts in MN, WI, and northern IA/IL; five-day coverage looks strong in the WCB and Plains, lightest in IL and the SE belt. Extended maps continue to show decent chances, particularly in the NW and SE belt, with temperatures generally on the high side of normal up into late June.
Now that the monthly WASDE data has been released trade will quickly revert to daily weather forecasts for much of its price discovery determination. Much of the Corn Belt is now showing drought conditions given the lack of precipitation over the past several weeks. Forecasts have started to turn wetter though and rains have moved through the US to limit market response to dry conditions at this time. If we remain dry through the month end trade will start to show more concern and a premium will be added accordingly. While weather is the main source of fundamental influence on futures, managed money flow has the greatest impact on market movement on a whole. We will soon start to see this crowd, along with several others start to position for the USDA reports that will be released at the end of the month, these being quarterly stocks and planted acreage data. At this time trade is paying more attention to acreage but we could easily see a surprise from the inventory numbers. This data release also comes at quarter end, which will likely elevate market positioning even more. For today’s session trade will await the weekly crop report that is expected to show further deterioration to crop ratings.
Have a great day!