Sellers remain persistent in the corn market despite a friendly old-crop balance sheet, yielding little to the continued tightening of the balance sheet and the on-set of weather and pollination issues. Only seven times since 1981 have December corn futures not seen a summer corn rally. Last year was one of those years, with 2014 and 2004 being the next most recent. Only twice has there been consecutive years without a summer rally, 1985 and 1986, at the tail end of the farm crisis when the 1985 Farm Bill spurred hefty production, driving prices persistently lower.
As the summer goes on, the probability for a rally shrink. The current bottom in December futures took place on July 11. Only three times have a rally begun at or after that date, 2018, 2003 and 1999. Each of those years saw crop conditions above 70% “good” to “excellent” in early July. While conditions are subjective, they each give a look into how the crop was faring at the start of pollination.
It is not surprising to see that price action this year fares similarly to how it did in those three other years. The impact of twisted tassels remains to be seen but continues to garner a lot of attention across the marketplace. If pollination issues prove to be present across the Corn Belt, it could lead to a quick reaction in price.
Rallies that start late in the year tend to be modestly stronger the average of all summer rallies. Late rallies tend to be weather driven, reacting quickly. Given that pollination issues are permanent, the rallies tend to be longer than the average of all summer rallies as well.