Corn Futures Increase on Weather Concerns, Export Demand

Noting that higher temperatures could cause problems in the corn yield, the price of corn futures increased today, closing up by 12 cents to $5.94 a bushel. December corn also increased by a little over 12 cents, finishing the session at $6.13 1/2.

The concern is over how well the corn pollinates during this crucial time, as too warm weather could hamper the yield results.

Even with the strong response of buyers, the warm weather isn't anticipated to stay too long, and hopefully will just be a temporary blip.

Drew Lerner, an agricultural meteorologist at World Weather Inc. said, "We shouldn't have more than just a few days of stressful conditions in the eastern part of the corn belt."

Other factors were concerns by end-users that other variables like a late growing season, early frost and increased export demands could impact them down the road, so they wanted to lock inventory in so they don't lose out later in the year.

Corn Prices Come Crashing Down to Earth, Lost Over 11% in Week

Even though the flooding in June wiped away some cornfields, the warm weather after the flood receded has helped corn surge back, resulting in the steep drop in price.

December delivery for corn dropped 21 cents to finish at $6.29 a bushel on the CBOT. That's the lowest price point since May 30.

The flooding had driven up prices in June to as high as $7.96 a bushel; more than a 20 percent increase.

The specific corn-related reasons for the decline the good weather is expected to help the corn to pollinate great during the July 20 to July 30 period. That's the most critical period for the pollination period, which determines what the extent of the corn yield will be.

Another reason for the decline in prices is the decreased demand, which has offset the lower production levels.

The year-end corn production is projected at 11.7 billion bushels by the USDA. That's about 20 million bushels less than its June forecast.