Corn Prices Near Multi-Month Highs Amid Tight Supply and Strong Demand
Corn prices held near multi-month highs on Monday, driven by disappointing Midwest Crop Tour yield results. The crop tour's lowest yield ratings in six years has market analysts flagging a potential pullback risk. According to Mike Minor of Professional Ag Marketing, the funds and algorithms have 'kind of latched on' to the disappointing yield data.
Minor pointed out that even under a trendline yield scenario, supply is tight enough that a corn yield meaningfully below the USDA's 180-bushel estimate would likely force the market to ration demand through higher prices. He noted strong exports, heavy feed and residual demand, and production problems overseas in the EU and South America as supporting factors.
John Heinberg of Total Farm Marketing offered a more cautious technical read on the same $5.24 level. He noted that the rally from August's low of $4.57 to Monday's high matched an earlier 67-cent rally from June to July, a chart pattern he said can signal resistance.
The analysts pointed out that soybeans diverged sharply from corn, pressured by a sharp selloff in crude oil and soybean oil. Minor noted that the crop tour's soybean yield estimate came in above USDA's current number, meaning the crop 'still got some work to do' before the market gets the same bullish confirmation corn received.