After two years in a row without one, December corn has scored a summer rally by making a new high after May 1, the date we use to define the beginning of the season.
Until 2024 and 2025, the market had missed out on a rally in consecutive years only once before, in the middle of the 1980s farm crisis. Since 1981, there have been only seven years without a summer rally, while several years have seen multiple rallies. There have now been 53 summer rallies over the last 45 years, with 15 of those, including this year’s, beginning in the first three weeks of May.
Looking at only the first rally of the summer, the average starting date in those years was June 4, and concluding on July 5, averaging about 31 days. The duration isn’t necessarily indicative of how much prices could rally. Prices could grind higher slowly over a long period of time if weather or the ongoing war provides a catalyst, or explode higher in a short period, similar to the 7.7% rally seen in just a week in 2022. The average gain for all first summer rallies is 19.2%. That would work out to about 96¢ assuming a start at Friday’s close of $4.98 3/4. Bulls remain in control, with this benchmark as a target.
That said, this week’s drawdown has raised questions about the rally’s durability. Our analysis shows summer rallies have seen an average maximum drawdown of 3% while still trending higher. That would be at $4.89 given Friday’s for-the-move high close, coinciding with the 20-day moving average. The heightened volatility across the marketplace has led to bigger price ranges than normal, but this price will be key support going forward.
