Corn Futures Hit One-Month High on U.S. Weather Risks and Surging Oil Prices

Corn futures on the Chicago Board of Trade (CBOT) advanced on Monday, with the key new-crop contract touching its highest point in over a month. The rally was fueled by a combination of weather forecasts pointing to stressful growing conditions in the U.S. and a sharp rise in energy prices amid renewed geopolitical tensions in the Middle East.

Price Action

The most-active new-crop December corn contract gained 2-1/4 cents to settle at $4.63-1/4 per bushel, according to CBOT data. During the session, it reached a high of $4.69-1/2, a level not seen since June 2. The nearby September contract also finished higher, adding 1-1/2 cents to close at $4.41 per bushel.

Dual Catalysts Drive Gains

Two primary factors provided upward momentum for corn prices on Monday: adverse weather outlooks and a significant rally in the energy complex.

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Crop Weather Concerns

Weather models are forecasting hot and mostly dry conditions for the western U.S. Corn Belt this week, with the potential for the pattern to persist. July is a critical period for the corn crop's development, as it undergoes pollination—a key phase that heavily influences final yields. The prospect of heat stress and insufficient moisture during this window raises concerns about potential supply constraints.

Energy Market Spillover

Corn futures also drew support from a surge in crude oil, which jumped more than 8%. The spike in energy markets followed reports that the U.S. was reinstating a naval blockade on Iran, escalating tensions and raising concerns about oil shipments through the Strait of Hormuz. Corn prices often track crude oil movements due to corn's significant role as a primary feedstock for producing ethanol, a biofuel.