A weaker US dollar and ongoing heavy rainfall in the Eastern Corn Belt triggered a moderate week-opening rally (with weak volume). Our work suggests that spring rainfall in certain areas of the Corn Belt looks to exceed the threshold that adds to yield potential, and as such we doubt breaks can be sustained into the first part of June. Funds bought/covered an estimated 3,000 contracts.
The US corn crop through Sunday was 84% planted, unchanged from the same day a year ago and very close to the longer term average. Early crop conditions are still very mixed. GD/EX in IL this week is pegged at 51%, vs. 69% a year ago; ratings in MO rest at 52%, vs. 75% a year ago. The remainder of the Central US is in solid shape (MN’s crop is pegged at 82% GD/EX, vs. 65% last year), but with only average conditions to be revealed next week in the E Corn Belt, it’s unlikely that initial US ratings will be better than 64-67%
For now, corn lacks the spark needed to alter the long established range. That may change with June weather better understood following the coming US holiday. Another month of cold/wet weather is not desired while warm/dry can help mend ragged looking crops. Watch weather closely next Tuesday.