Corn Prices Spike Above $5 as Crop Tour Reveals Disappointing Yields

Corn futures prices surged to their highest level since May at $5.03 3/4, driven by disappointing findings from the Midwest Crop Tour, according to market analyst Ted Seifried.

The tour's scouts reported down significantly lower corn yields in most states, including South Dakota, Ohio, Nebraska, and Indiana, with Illinois posting a seven-year low for the tour. This is 'not anywhere near what the USDA is expecting', Seifried said.

The rally is not just about production, but also due to increased demand for exports, as the USDA's August World Agricultural Supply and Demand Estimates report showed an additional 1.4 million corn acres and lowered yield to 180.7 bushels per acre nationally. New-crop exports rose 75 million bushels before the marketing year has even begun, which Seifried called 'unusual'. He linked this demand increase to concerns about a potential Super El Nino disrupting South American fertilizer supply and planting.

Despite the bullish fundamentals, Seifried urged caution on chasing the rally into September, pointing out that corn often puts in its highs in August even in supply-short years. With a large volume of old-crop corn from last year's 17-billion-bushel harvest still needing to move, he expects natural selling pressure in the weeks ahead.