On Monday, corn prices went up surprisingly despite farmers from the US planting more crops, increasing acreage.
Corn futures for December delivery rose by 1.29% to $520.62 per metric ton on July 17’s Asian afternoon session.
Moreover, the price spike was considered unpredictable due to the switch to wetter weather in the US belt. High acreage and critical rains caused a 21.00% drop in the CBOT December crop in the last seven trading days.
However, the value steadied quickly after the session. In the week that closed on July 11, corn climbed by 1.60% amid an expected volume cut from the USDA.
On the other hand, money managers increased their net short in the crop’s CBOT futures and options. The jump equated to 63,052 contracts from 18,209 last week against forecasts of small net buying.
The USDA reduced the US corn output on July 12 due to dry weather in June. Still, it would set a new record. Furthermore, American and global balance sheets rolled out as expected, while the December crop jumped by 2.40% from Wednesday to Friday. It closed the week at $5.13 per bushel.
In addition, subsoil moisture remains an issue in the US Corn Belt and maintains its vulnerability due to weather conditions. Also, there were discussions about logistical bottlenecks in Brazil exports that could bump US demand.
Weather Concerns Boost Corn Prices
The prior week’s dry weather concerns supported Chicago corn and soybean contracts. Mainly, the US Midwest pulled up the crop’s value.
According to economists, corn and soybean markets are taking advantage of the current weather patterns. Concerns about dry weather supported the grains. Also, the US crop has undergone its critical pollination phase, and insufficient moisture could affect volumes.
Additionally, experts said the market is currently highlighting the problems with the yield. However, the doubts are not enough to go out of the witnessed trading range.
Moreover, corn followed wheat in terms of output problems and technical trading. For other commodities like soybeans, its old crop fell while the new crop climbed.