Corn, Soybean Crops Face Stress Amid Weather Worries

The US corn and soybean crops may be facing stress due to weather conditions. The USDA reported that the corn crop is at 63% Good to Excellent, which is one point below the five-year average for the week but 10 points below last year's level at this point in the season. Meanwhile, the soybean crop is at 63% Good to Excellent, up 1 point from the five-year average for the week but down 7 points from this same week last year.

Managed funds appeared to have bought 15K contracts of corn and beans on the day. The recent break in corn and bean prices attracted some export interest, with 'unknown destinations' (potentially China) booking a purchase of 197,272 metric tons of US corn.

Calendar spreads in corn and beans saw some modest strength today, rebounding from yesterday's weakness. Analyst Sean Lusk believes that the market may be positioning for production issues or volatility caused by geopolitical tensions, particularly around the US-Iran conflict. He suggests using option strangles as a way to position oneself in the market.

Lusk predicts that either November soybeans will trade to $13.00 or revisit $11.00 into harvest, while December corn will either revisit $4.40 or make a run for $5.25. These views are based on his analysis of current market conditions and trends.