U.S. Corn Market Turns Focus to Domestic Yields Post-South American Harvest 

As the South American harvest season wraps up, the U.S. corn market is shifting its attention to domestic production. With Brazil and Argentina’s crops largely accounted for, traders and producers focus on U.S. crop conditions. The USDA’s recent reports show that most corn planting is complete, but uneven spring weather has raised concerns about yield potential in some areas. Market participants are closely watching the Midwest, where the bulk of the U.S. corn crop is grown, for any signs of stress from drought or excessive rain. Early summer weather patterns will significantly determine how much corn the U.S. can produce this year, especially with strong global demand. So far, Mother Nature is taking good care of the corn crops. But, as we all know, she has been known to bring the unexpected at the most critical time. 

Weather in the U.S. Corn Belt is now the primary driver of market sentiment. Forecasts for July and August are critical, as corn plants pollinate and develop kernels during these months. Any prolonged heatwaves or dry spells could cut yields, while favorable conditions could push production higher. Traders are also keeping an eye on export demand and ethanol production, which compete for supply. After South America’s harvest, global buyers are turning to the U.S. for corn, so any hiccups in domestic output could tighten supplies and lift prices. While Brazil is experiencing a strong harvest, rising domestic demand for livestock feed and ethanol is projected to decrease its corn exports. The market is watching how the weather plays out across key growing regions.

U.S. Corn Crop at 73% Good-to-Excellent, Eyes on July Weather 

As of late June, U.S. corn planting is nearly complete, with 95.2 million acres planted, up 5% from last year, and 87% of the crop has emerged, slightly ahead of the five-year average of 85%. The USDA’s latest Crop Progress report, released on June 30, indicates that 73% of the corn crop is rated in good-to-excellent condition, a 3% improvement from the previous week and the highest rating since 2018. About 8% of the crop is silking, compared to the five-year average of 6%. However, concerns linger in some regions due to uneven spring weather, including excessive rain in parts of the Midwest and drought in others, which could impact yields as the crop enters critical growth stages. 

Source: National Agricultural Statistics Service (NASS) 

USDA Recent Corn Crop Drought Reports 

Source: USDA 

Approximately 12% of corn production is within an area experiencing drought. This number has been steadily dropping over the last few weeks.

Source: USDA 

Nebraska, the third-largest U.S. producer of corn, is experiencing the worst exposure to the drought in the major corn-growing areas. While Iowa, the largest producer of U.S. corn, is minimal. And the second-largest producer of corn, Illinois, is a few points higher. Overall, the current drought outlook continues to be bearish for corn prices. 

Commitment of Traders (COT) Report   

The latest COT report looks bearish for corn prices as Managed Money continues to add to their short positions (red bars). Observing the numbers in the table reveals some interesting points supporting the bearish funds:

• Currently, funds only have 348K short positions compared to last year at the same time, 471K. Meaning they have plenty more room to add to their short positions.
• The number of funds short this year is 88 compared to 102 last year, 14 fewer. This implies that short funds are more aggressive, and the other 14 funds may still be waiting for a point to enter the market.   
• Managed Money will use spreads when the market is less directional and switch to outrights when there are prominent trends. Looking at the Spread column in the table and the yellow line (price action) on the chart, we can see there is a dominant trend this year and last year at the same time. During March 2025, prices were more sideways, and the funds increased their spread positions. 

Technical Picture 

Source: Barchart 

Technically, the December 2025 new crop contract looks bearish. Typically, this contract is the most popular for hedging corn production. In an article published in March 2025, Northern AG Network wrote about the 2025 Spring Crop Insurance Prices. The article discussed the production cost for corn producers. “USDA estimates it will cost an average of $871 per acre to grow corn in 2025, and using USDA’s trendline yield estimate of 181 bushels per acre, that implies a break-even price of $4.73 on corn.” As we look at the chart since January 2025, producers have only had two opportunities to lock in break-even prices. Which, by all means, would not be the ultimate goal of a producer. Much like last year, this will leave a lot of unpriced corn. As we saw in the previous couple of days, Rallies should be met with aggressive selling. 

Seasonal Pattern  

  Source: Moore Research Center, Inc. (MRCI) 

Managed Money is well aware of seasonal patterns in the commodity markets. This year is no exception. Research from MRCI has shown a 15-year pattern (blue line) of selling during July. The fundamentals of planting and harvesting crops do not drastically change yearly except in severe adverse weather, so crop seasonal patterns are well respected. 

For this year, MRCI research has identified that the September corn contract has closed lower on approximately August 01 than on July 16 for 13 of the past 15 years (yellow box), an 87% occurrence rate. During this time, four years never had a daily closing drawdown. The average profit was 22 cents at $50 per penny, yielding approximately $1,100 for a hypothetical 15-year testing period.   

As a crucial reminder, while seasonal patterns can provide valuable insights, they should not be the basis for trading decisions. Traders must consider various technical and fundamental indicators, risk management strategies, and market conditions to make informed and balanced trading decisions.  

Source: MRCI 

Assets to Trade the Corn Market 

Traders in the U.S. corn market have several options to participate. 

• The primary avenue is futures contracts on the Chicago Board of Trade (CBOT), where corn futures are actively traded, allowing speculation on price movements or hedging against risks: the standard size contract (ZC) and the Mini-contract (XN).
• Options on these futures provide additional flexibility, enabling traders to buy or sell at specific prices.
• Cash markets, including spot and forward contracts, are also available for physical corn through local elevators or processors, especially for farmers and commercial buyers.
• Additionally, exchange-traded funds (ETFs) like the Teucrium Corn Fund (CORN) offer a way for retail investors to gain exposure without trading futures directly. 

In closing…   

As the South American harvest fades, the U.S. corn market is zeroing in on domestic production, with 95.2 million acres planted in 2025—up 5% from last year—and 73% of the crop rated good-to-excellent, the best since 2018. Yet, uneven spring weather, with drought hitting 12% of production and excessive rain in parts of the Midwest, keeps traders on edge as July’s critical pollination period looms. Global demand is strong, but Brazil’s rising domestic needs may curb its exports, putting more pressure on the U.S. supply. The market’s bearish tilt, reflected in Managed Money’s short positions and a seasonal July sell-off pattern, suggests prices could stay under pressure unless weather disrupts yields. With available futures, options, cash markets, and ETFs, traders have plenty of tools to navigate this volatility. So, what’s your move—will you bet on Mother Nature’s next twist or play the bearish trend?