June Corn Price Forecasts - Harvests, crude, fund sales drive corn into oversold territory
• Corn prices weighed by harvest pressure and Iran-US deal
• Argentine prices particularly weak, amid record harvest
• However, corn oversold, may lose popularity among growers
• In Europe, heatwave and sowings decline extends supply risk
Corn prices have, like those of wheat, sagged under the weight of geopolitical and harvest pressures.
The dip in oil prices prompted by the Iran-US agreement, and the reopening of the Strait of Hormuz, implies pressure for grains, given their use in making biofuels and their status, for some investors, as proxy commodities for crude. The correlation between spot Brent crude and Chicago corn prices is, at 81% so far this century, slightly stronger than wheat’s 79%.
As for harvest pressure, that is stemming from South America, where Brazil is reaping what is expected to be a substantial (safrinha) corn crop, and Argentine farmers more than 40% through a record harvest.
In the export market, Argentine corn prices have sunk below $200/t FOB in a bid for demand for a crop which some sources believe may hit 70Mt.
Paranagua, Brazil export prices have slid by 10% month on month to $209/t, and face further pressure yet, to judge by Mato Grosso, the top producing state, where values dipped below $134/t last week for the first time since September.
That in turn puts pressure on the US, if it is to reach the record 84.5Mt in corn exports that the USDA expects this season, and the 80.0Mt forecast for 2026/27 (as starts in September).
With a straightforward US spring planting campaign adding cause to remove risk premium as well, managed money has piled on short positions. The 103.2K-contract rise, to 296.2K contracts, in funds’ gross short position in Chicago corn futures in the week to 9 June was by far the largest on data going back to 2006.
Still, funds are cautious at current levels. Further corn price downside looks constrained by factors including technical ones, which show the show the market as oversold, as its tests long-term support. Seasonally, corn looks to be setting lows at current levels.
Furthermore, pressure from Brazil’s harvest may, thanks to geography, be front-loaded this year, with crops most promising in early harvesting states such as Mato Grosso, the top producer.
Some risk premium should be retained too for US corn given the extent of the growing season yet to come, especially when its initial condition ratings are only average, and shy of those which might be expected if it is to reach the USDA’s bumper yield forecast of 6.0t/ha.
Even if the US crop does prove strong, that represents only the start of a 2026/27 season which the USDA foresees witnessing a 14Mt output shortfall, and a 6.8Mt drawdown in exporter stocks.
That factors in another record Brazilian corn crop of 139.0Mt, which looks a stretch given prices below production costs for many growers. In Mato Grosso, growers will need 2026/27 prices of $150/t, 12% above spot values, just to break even, according to local research institute Imea.
The potential for China to lift imports offers upside price risk too. Corn represents an obvious target if China really is to buy $17bn of US ags, on top of soybeans, that it is has committed to, according to the White House - although, signally, Beijing has yet to confirm this obligation.
Tighter European markets
Among other major growers, the EU looks at a growing risk of a third successive disappointing harvest, if western Europe’s looming heatwave proves as severe as forecast.
Output prospects have already been sapped by weak sowings in France, the EU’s top grower, where the ag ministry on Tuesday lowered its area estimate to 1.31Mha – a fall of 19% year on year, and the smallest area since at least the 1990s.
European corn values are likely to retain the above-average premium to US ones they have held for most of the past two years. That said, the current Matif/CBOT futures premium above €80/t spot is at its limit, given the extent of discounted South American offers, which are now weighing on values in Ukraine, the default origin for EU imports.
Seasonality implies South American export prices starting to recover in early July, although Chicago corn, the world benchmark, will likely be slower to recover, given the large US harvest forecast ahead.
