Looking to the Futures
Corn Drops to Four-Year Low

The front-month corn contract, currently accounting for December delivery, settled at 422.5 on Wednesday. On Thursday, it traded as low as 419.25. Those are the lowest respective trade and settlement prices since April 2021. Benign conditions and increased acreage have contributed to the weakness.
Conditions have been good and look to continue that trend in the short term. The Crop Progress Report containing the first corn conditions of the year for the week ending May 25 had 68% of the corn crop rated good or excellent. The most recent report for the week ending June 22 had 70% of the crop rated good or excellent, down 2% from the prior week but ahead of last year's numbers. Looking ahead, warm rainy conditions are expected across the Corn Belt for the next week, with precipitation in the Upper Midwest expected to be 50% greater than average. Emergence is also running above last year at 97%.
The USDA's Prospective Plantings report, issued March 31, showed that producers expected to plant 95.3 million acres of corn in 2025, an increase of 5% from last year. If realized, that would represent the highest acreage for corn since 2013. Soybean growers intend to plant 83.5 million acres in 2025, down 4% from last year. The percentage of acres planted has been running ahead of last year's numbers and in line with the five-year average. The USDA will release the report containing confirmed planted acreage on Monday. In 15 of the past 20 years, planted acreage for corn has increased from the Prospective Plantings report.
The most recent World Agricultural Supply and Demand Estimates report from June 12 shows that yields are expected to increase about 1%, from 179.3 bushels per acre to 181.0. Production for the year is estimated to increase 6.4% to 15.82 billion bushels. Exports and domestic demand are expected to increase slightly, but not nearly enough to offset the production increase. Ending stocks are forecasted to increase from 1.365 billion bushels to 1.75 billion bushels. Consequently, the average farm price per bushel is expected to decrease from 435 cents to 420 cents.
Fuel ethanol production was down almost 3% last week. Daily production averaged 1.081 million barrels, down 28,000 from the prior week. That was more than offset by a drop in exports from 163,000 barrels per day to 110,000 barrels per day. Weekly ending stocks were 24.404 million barrels, an increase of 284,000 week over week. In April the EPA issued an emergency fuel waiver allowing the sale of E15 gasoline containing 15% ethanol. Normally, the switch to the summer blend requires producers to cap ethanol content at 10%. While slightly bullish for corn, it pales in comparison to the boost to soybeans (/ZS) on June 13, when the EPA proposed a big increase in biodiesel blending requirements for the Renewable Fuel Standard. Soybean oil (/ZL) closed limit-up two days in a row following the proposal. Soybeans have given up the gain since then, but the corn selloff has the current price ratio of soybeans to corn solidly above the 50-day moving average at 2.4. That ratio is plotted in the bottom graph in the chart below.
Technicals
The RSI has been oversold below 30 all week. It has not reached the midline of 50 since April. This week has had the most oversold condition in the RSI since last July. The 9-, 20, and 50-day SMAs are all in a negative setup following a three-way cross in early May. The MACD has been negative for the past week.

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