Corn Prices Hit $5-$5.40 as Yields Drop Amid Overbought Market

Corn futures have surged 25% in July and August, outperforming even Nvidia's recent rally. However, analysts are warning that the market may be overbought, suggesting a steady diet of bullish news is needed to sustain the rally. The corn price has been boosted by lower-than-expected yields, with USDA's first surveys indicating a yield of 180.7 bushels per acre, down from the expected normal of 183 bpa.

The impact of Midwest weather data and other methods used to project crop size are mixed, including normal yields. However, one thing appears certain: corn yields are down from the record 186.5-bpa achieved in 2025. The question is by how much?

Vegetation Health Indexes have declined 5% from 2025's strong showing but ticked above average in the latest week, translating to potential yields in line with USDA's August estimate. If correct, a shrinking US surplus depends on demand, which may be boosted by drought in Europe and the former Soviet Union reducing export flows out of the Black Sea.

Cash prices could average $4.40 for the 2026 crop, with the top third selling range for rallies from $5 to $5.40. December corn has hit the top end of that range last week, ramping up risk.