Corn futures on the Chicago Board of Trade closed lower on Wednesday following a session in which traders pared back positions after prices briefly reached their highest levels in roughly a month. Updated U.S. weather guidance showing reduced heat for the Midwest and a firmer dollar combined to weigh on markets.
The September contract finished the day down 8-3/4 cents at $4.35 per bushel, retreating from an intraday peak of $4.44-3/4. The December contract lost 8 cents, settling at $4.56-1/4 after pulling back from an earlier $4.65-3/4, a level that marked its strongest reading since June 3.
Forecasters trimmed expectations for mid-July heat across the Midwest, easing some concern about crop stress during pollination. That shift in the weather outlook reduced a key bullish factor for prices and helped underpin the profit-taking that arose after the morning rally.
Market participants also cited a stronger U.S. dollar as a headwind. With a firmer dollar, U.S. grain prices become relatively less competitive on global markets, a dynamic that can blunt export-related buying and place pressure on domestic futures.
CBOT grain contracts exhibited only a muted reaction to an about 5% jump in crude oil futures. That rally in crude followed remarks from U.S. President Donald Trump that an interim deal to end the Iran war was "over." Despite the sharp move in energy, corn futures largely ignored that impulse, instead responding more to the weather and currency developments.
Data from the U.S. Energy Information Administration provided additional details on biofuel demand. Corn-based ethanol production for the week ended July 3 was reported at 1.093 million barrels per day, a decline of 24,000 barrels per day from the prior week. At the same time, U.S. ethanol stockpiles fell to 23.928 million barrels, a weekly decline of 762,000 barrels and the lowest reported level since January.
Those ethanol figures show a modest pullback in weekly output and a notable draw in inventories, factors that traders monitor for insight into domestic corn demand. However, in Wednesday's trading session, the combination of reduced weather risk and currency strength appeared to dominate price direction.
Market context
Prices that had climbed to multi-week highs earlier in the session were trimmed as participants locked in gains. The reduced prospect of heat stress for key U.S. corn areas during a critical growth stage removed some near-term support for futures.
Outlook drivers to watch - Updated weather projections for the Midwest; movements in the U.S. dollar; weekly ethanol production and stockpile reports; and energy market volatility tied to geopolitical comments.