July fell below major chart-based supported, and weekly price action confirms the long-established range $3.50-3.90, basis spot, looks to hold without threatening weather in July. ARC does caution that extended range outlooks have trended warmer and drier in the first week of July, but near term weather will boost crop ratings in the next two Crop Progress reports.
Sunday night’s forecast will drive price action early next week, and whether the models maintain widespread rainfall June 29-July 2 will be most important. But while US weather through the next 8-10 days will be rather pleasant, EU & Black Sea crops will begin pollination amid a lack of needed rainfall and abnormal heat. Highs in Romania, Ukraine and Southern Russia will reach into the 90s and low 100s. South American fob offers are inching towards decade-lows at $145-150/MT, and ARC doubts much downside risk exists in world cash markets beyond the next 1-2 weeks. As such, Dec corn is expected to find support at/above $3.70 until/unless above normal US precip in late July & early August can be confirmed.
The point is that while the market has rightfully fallen on improving weather forecasts, new sales are not advised. Managed funds as of Tues were short a net 50,000 contracts, and today are estimated to be short closer to 90,000.
