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Corn Futures Decline as Falling Crude Oil Prices and Profit-Taking Weigh on Market
Chicago Board of Trade (CBOT) corn futures ended Monday's session in negative territory, as a combination of falling energy prices, profit-taking, and a favorable weather outlook exerted bearish pressure on the market.
Energy and Weather Headwinds
The primary driver for the decline was a sharp drop in crude oil prices. According to the report, Brent crude futures settled 3.9% lower after the U.S. suspended air strikes against Iran over the weekend, raising hopes for de-escalation in the Middle East. Lower oil prices can reduce the appeal of corn-based ethanol as an alternative fuel, dampening demand for the grain. The slide in energy markets prompted traders to take profits on recent corn price increases.
Adding to the downward pressure was an improved weather forecast. Commodity Weather Group reported that temperatures are expected to moderate following a hot weekend. Milder weather conditions are generally beneficial for crop development, potentially leading to higher yields and increased supply.
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The most-active December corn contract on the CBOT saw a notable decline, reflecting the bearish sentiment in the market.
- December Corn (ZC): Finished down 13-1/2 cents to settle at $4.47 per bushel.
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