From the July 01, 2010 issue of Futures Magazine • Subscribe!

Corn takes a tumble

Positive weather conditions have meant lower prices for corn, and most analysts expect that to continue into the summer.

“It’s looking like a bumper crop that could surpass last year’s record yields. That’s cast a pall over the corn market. It’s going to take some type of weather scare to knock corn out of its doldrums,” says John Sanow, analyst at Telvent DTN. He says for the September contract, “We have decent support in the $2.90 to $3.20. As we approach that level, we should see demand globally from increased exports. I don’t see it falling below that. If we get some type of summer rally, we may test the $4 level, but [nothing] above that.”

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Joe Victor, vice president at Allendale, says demand will stay positive as long as weather holds and expects corn to reach a low of $3.40 and a high of $3.66 on the September contract.

Rich Feltes, director of commodities research at MFGlobal, sees more downside pressure in corn. “December corn is likely going to [move] lower [due to] improving yield potential, the large farmer cash long and the larger backdrop of less institutional money coming into commodities because of a peeling back of global growth expectations,” he says. Feltes expects the September contract to be at $3.25-$3.30 in mid-July.

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