Corn prices have tumbled by more than -30 cents in just the past 12 trading sessions. Bulls are hoping that weather headlines out of the Black Sea region might help stop some of the recent bleeding.
From what I understand, dryness in parts of Russia has intensified a bit and the drought might widen and worsen during the next couple of weeks. Meaning yields might start being trimmed more aggressively and the market might want to add a little risk-premium on the news. As for Brazil's second-crop corn, it feels like things have stabilized. It ill be interesting to see what the USDA has to say about both the Argentine and Brazil production estimates in tomorrow's report.
Here at home, the trade is considering some abnormally high temperatures, but it sounds like they were fairly limited to the Plains. I still hear talk of dry conditions in parts of Missouri, Illinois, and portions of the Delta. Unfortunately, with the current crop-condition rating showing one of the best starts we've seen in years, it's tough to convince the trade that there's any reason to be concerned. I'm hoping the ratings in some states start to pull-back a bit to reflect more realist conditions. I'm just not seeing it as good as they are in some of these areas and believe overall conditions should come down a bit.
As for tomorrow's USDA monthly supply and demand report, South American production estimates will be in play, as well as forecasts for U.S. exports, ethanol and feed usage. As a producer, I'm staying extremely patient. End-users should be using the break in price to secure some additional supply. As a spec, I like the thought of building a conservative longer-term bullish position.