Corn Futures Advance Amid Crop Report and Tariff Concerns

Corn futures continued their recent upward trend, trading positively on Tuesday. Midday trading saw corn contracts gaining between 1 and 3 cents, with the CmdtyView national average Cash Corn price rising by a nickel to $4.18 ¾. This rally was underpinned by data from the latest US Department of Agriculture (USDA) crop progress report and broader geopolitical developments.

The weekly Crop Progress report released by the USDA for the period ending July 19 indicated that 59% of the US corn crop had reached the silking stage. This figure is 5 percentage points ahead of the five-year average, with 13% of the crop now in the dough stage. However, US condition ratings for corn saw a slight decline of 1% to 67% in good to excellent condition, and the Brugler500 index slipped 1 point to 372. While ratings dropped in states like North Dakota, South Dakota, Colorado, Wisconsin, Kansas, Missouri, and Minnesota, improvements were noted in Illinois, Indiana, Iowa, Nebraska, and Ohio.

Key market drivers also included the USDA's announcement of a private export sale of 100,000 metric tons of corn to Colombia for the 2026/27 marketing year. The weekly Export Inspections report for the week ending July 16 showed corn shipments totaling 1.55 million metric tons (60.7 million bushels). Although this was a slight dip from the previous week, it represented a significant 57.36% increase compared to the same week last year. Total marketing year shipments have now reached 73.77 million metric tons (2.904 billion bushels), surpassing the same period last year by 25.42%.

Data from the Commodity Futures Trading Commission (CFTC) revealed that managed money accounts increased their net long positions in corn futures and options by 30,732 contracts in the week ending July 14, largely due to short covering. The net long position stood at 43,391 contracts as of Tuesday. Meanwhile, in Brazil, AgRural estimates that 49% of the second corn crop has been harvested, lagging behind last year's pace of 55%.

In a broader economic context, President Trump's late Monday announcement of imposing 50% tariffs on certain Canadian goods, citing trade discrimination, also resonated in the markets. Energy and potash products were exempted from these tariffs. Furthermore, ongoing conflicts in the Middle East and tensions affecting shipping through the Strait of Hormuz continue to introduce uncertainty into global commodity markets. NOAA's 7-day Quantitative Precipitation Forecast (QPF) predicts 1 to 2 inches of rain in parts of Nebraska, Kansas, Missouri, and Ohio, while drier conditions (less than 0.5 inches) are anticipated for other parts of the Corn Belt.

Analysts suggest that the corn market will remain sensitive to weather patterns, global trade policies, and currency fluctuations in the coming period. Trading Economics forecasts corn prices to trade at 450.89 USd/BU by the end of this quarter, with a potential rise to 475.39 USd/BU within 12 months. However, global corn production is projected to decline in the 2026/27 marketing year due to higher input costs and lower yields in the US, indicating a tightening in global supply.