Corn Slips as Oil Prices Slump

Corn futures fell to around $4.4 per bushel, easing from multi-week highs as weaker crude oil prices weighed on sentiment across agricultural markets. Oil prices plunged amid rising optimism over a potential US-Iran deal that could reopen the Strait of Hormuz, reducing support for biofuel-linked crops. Agricultural commodity prices are often influenced by energy markets due to the growing use of crop-based feedstocks in biofuel production. Additional pressure came from expectations of abundant supplies, with brokerage StoneX projecting the 2026 US corn harvest at 16.16 billion bushels. The USDA also lowered its good-to-excellent rating for the US corn crop for a third consecutive week, though the deterioration did little to offset the market's bearish supply outlook. Meanwhile, traders continued to monitor the Russia-Ukraine conflict and its impact on Black Sea grain exports, although expectations for another large harvest from the region continued to weigh on prices.

Corn futures rose to around $4.5 per bushel, as mounting concerns over crop losses in Europe and parts of China outweighed expectations for another strong US harvest. Persistent heatwaves and prolonged dry weather across Western Europe, particularly in France, have severely stressed corn crops, prompting lower yield forecasts and raising fears of tighter global supplies. China is also experiencing hot and dry conditions in several key agricultural regions, adding to uncertainty over global feed grain production. Still, gains were capped by generally favorable crop prospects in the US, where forecasts continue to call for timely rainfall across much of the Midwest after brief periods of heat, supporting expectations for a large harvest. Market participants are also closely monitoring upcoming USDA crop condition reports for any signs that recent warmer weather has begun to affect yield potential.

Corn futures fell below $4.5 per bushel, easing from a recent nine-week high reached on July 24 as favorable weather forecasts across the US Midwest eased concerns over production risks. Forecasts call for ample rainfall and milder temperatures near the end of the week, improving yield prospects after recent heat concerns. The favorable outlook reinforced expectations for another large US harvest, weighing on prices. Still, losses were limited by firm ethanol demand as elevated crude oil prices amid the Middle East conflict continued to support biofuel production. Ongoing Russia-Ukraine tensions also underpinned grain markets, with attacks on Black Sea ports and grain infrastructure threatening export flows. Meanwhile, the longer-term outlook remained supported by a tighter global corn balance, with the USDA projecting world corn consumption to exceed production for a second straight season, leaving the market more vulnerable to weather disruptions and export disruptions.