Corn belt's calm weather dampens market hopes

No summer rally as corn and soybeans slide to new lows

By Farms.com

The 2024 trading landscape for Chicago corn and soybean futures is diverging from the norm. Unlike previous years where summer brought about rallies due to unpredictable weather impacts on crops, this year has seen a continuous downward trajectory.

By July, December corn futures had fallen 19% from the start of the year, paralleling their year-on-year drop, and November soybeans were down 14% since January, with a 21% decline from the same date last year.

This unusual market behavior is attributed to a combination of benign weather in the U.S. Corn Belt and weak demand for new crops.

This year stands out as November soybeans may record their highest price of the year on the first trading day, a phenomenon not seen since 1975. December corn could similarly mark its yearly high at the beginning of the year for the first time since 2013.

To revisit their peaks, November soybeans and December corn would need substantial increases of 16% and 23%, respectively.

Such increases have been historically rare, with only a few years like 2010 and 2020 seeing comparable rises due to significant reductions in expected U.S. stock levels.

The current market positions underscore a challenging season for traders and producers, as traditional summer rallies seem unlikely under prevailing conditions. This scenario presents a unique set of challenges for market participants navigating the 2024 crop year.