Technically Speaking

December corn futures have fallen prey to what has turned out to be a very favorable start to the 2025 crop year. Starting with the addition of 4.7 million acres of corn compared to a year ago, the corn crop was planted ahead of schedule, and weather, including the forecast all the way to July 10, has been and will be highly favorable. Crop ratings have steadily improved and there is plenty more rain to help the crop all the way to nearly mid-July. The prospect for U.S. corn yield and production looks increasingly optimistic, with new-crop ending stocks likely on a path up toward 2 billion bushels (bb) again.

Of course, an abrupt change in weather even into August can still turn the crop backward. Yes, old-crop corn demand has been stellar, but with the real potential that Argentina and Brazil combined could have as much as 12 million metric tons (mmt) to 14 mmt (441 mb to 514 mb) more corn than a year ago, competition for 2025-26 is likely to be much more formidable. A break below the $4.28 level on December corn is likely to lead to another leg lower. Volatility will remain high following the attack on Iran's nuclear capability, which has the potential to override what now appears to be bearish short-term corn technicals and fundamentals. In the longer term, world supplies of corn are the lowest in years.

After challenging the 100-day moving average three days ago, KC September wheat has fallen hard -- driven lower by a clear harvest path in the last several days. The bulk of the harvest is yet to come, and hedge pressure is likely to see this market pressed even lower in days ahead.

Even though new-crop U.S. wheat export sales are trending 17% higher than a year ago, cheap Russian wheat will continue to dominate, with the Russian ag minister calling their crop more than 7 mmt higher than a year ago. Add to that the fact that the world's two largest wheat buyers -- Egypt and China -- have reduced wheat purchases dramatically in the past year, and you have the recipe for a competitive battle for exports. One thing to keep an eye on is the fierce heat spell now impacting Europe and parts of the Black Sea. The other underlying support factor is the still-formidable net-short position held by funds.

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Comments above are for educational purposes only and are not meant as specific trade recommendations. The buying and selling of commodities, futures or options involve substantial risk and are not suitable for everyone.

Dana Mantini can be reached at dana.mantini@dtn.com

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