Three corn market fundamentals to monitor during July

During the month of June, December 2025 corn futures lost nearly 30 cents in value, which frustrated many producers as prices may now be below the cost of production.

Currently, the old crop carryout for corn is tight. The June 12 U.S. Department of Agriculture report was supportive as the USDA cut 2024-25 ending stocks 50 million bushels to 1.365 billion bushels as export demand was raised 50 million bushels to 2.65 billion bushels.

This was friendly news; however, corn futures did not rally. Why not? The trader mentality is likely thinking that new crop supplies will be “good enough.” 

According to the June World Agricultural Supply and Demand Estimates report, the USDA has pegged 2025-26 ending stocks at 1.75 billion bushels, and that is assuming a 181-bushel nationwide yield. The perception of larger supplies is keeping new crop corn futures on the defensive.

From a marketing perspective

Will corn prices continue to fall lower? Or is there any hope of a rally? What should producers be monitoring during the month of July? Here are three fundamentals to watch.

First, keep an eye on managed money fund trader activity. Fund managers watch and monitor grain market fundamentals and technical chart aspects, as they look for opportunities to invest and make money. When they are long (buyers) in the grain market, prices tend to trade higher, and there are usually underlying friendly fundamental components supporting grain prices, too. When funds are short (sellers) in the market, it is often due to grain supply and demand fundamentals that are shifting to bearish.

Currently, fund traders seem to believe that the United States farmer will be able to achieve record yield for the 2025-26 crop year, and that U.S. supplies of corn will grow to comfortable levels come harvest. As of the June 23 Commitment of Traders Report, they were short a hefty 184,788 contracts.  

While past performance is not indicative of future results, it seems that unless there is a surprise weather issue later this summer, managed money fund traders may be tempted to continue to build a further cumbersome, short position. How many short positions can they encompass? Well, last year, they were short approximately 350,000 contracts of corn by early August 2024, and front month corn future prices sank to a near $3.60 a bushel price point.

Next watch the July 11 USDA WASDE report. Look for any potential shifts in U.S. corn yield and demand. Especially take note of what the USDA says regarding the size of the Brazil corn crop. The USDA currently has the Brazil total corn crop pegged at 131 million metric tons. However, industry chatter is that their production number is likely higher than that.

Finally, and likely the most obvious, is to monitor weather conditions during the month of July. June brought welcomed rain to many portions of the Midwest and if that pattern continues, trader might begin to suggest that the U.S. corn crop average yield might be larger than the current USDA estimate of 181 bushels per acre. On the other hand, should a hotter and drier weather pattern begin to emerge, corn prices currently have very little weather premium built into the price, and a short-term rally might occur.

Prepare yourself…

Sometimes, it is easy to become complacent with grain marketing when prices are not overly attractive. Stay alert. Keep watching. Keep monitoring.

One unforeseen global event or weather event could transform the grain marketing landscape.

If you have questions, you can reach Naomi at [email protected] or find her on X (formerly twitter) @naomiblohm.

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