By Joanna Levin
AFTER weeks of steady losses, corn (maize) soared by over 7% last week, only to drop sharply again yesterday (22 June). The Chicago July futures contract closed at 250.75¢/bushel, down 2.75¢ from Friday, but still up 14.5¢ from 236.25¢/bushel the previous Friday (12 June ). At one point last week, the contract hit its highest level since early May.
Most of the rally was weather-related: flood damage in Iowa and Illinois, as well as poor short-term weather forecasts. Many pundits are expecting a heat-wave in the Midwest this week, which could cut crop yields. The question is whether this is the start of a long drought during July and August, the counterpart to El Niño.
Even poor export data was not enough to dampen last weeks market run. Export inspections for the week ended 11 June totalled only 18.2 million bushels, compared with estimates of 23-30m bushels. But corn farmers are hoping the recent recovery in the Yen will help US corn exports to Asia.