Corn Futures Decline on Stronger Dollar, Unexpectedly Positive USDA Crop Report

Corn futures on the Chicago Board of Trade (CBOT) traded lower on Tuesday, weighed down by a strengthening U.S. dollar and a surprisingly upbeat crop progress report from the U.S. government. The most-active December corn contract was last trading down 5 cents at $5.28-1/4 per bushel, with overall prices falling between 2 and 5 cents.

USDA Report Exceeds Expectations

The primary driver for the price decline was the latest crop condition report from the U.S. Department of Agriculture (USDA), released Monday. The agency's assessment bucked market expectations, creating bearish sentiment.

Key figures from the report include:

• The rating for U.S. corn in good-to-excellent condition was increased by 1 percentage point.
• This was contrary to a poll of analysts, who had anticipated a 1-point decline in crop quality.
• The USDA also reported that 8% of the corn crop had been harvested as of Sunday, ahead of the five-year average of 6% for this time of year.

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Market Headwinds and Support

Adding to the downward pressure on prices was a stronger U.S. dollar, which makes American agricultural exports more expensive for buyers using other currencies. This can dampen international demand.

However, further price declines were limited by weather concerns in the U.S. Midwest. Forecasters are predicting heavy rain across parts of the key growing region this week, which could potentially slow harvest fieldwork, particularly in Iowa, the nation's top corn-producing state.