Monday June 28th, 2010

Corn futures fell for the sixth straight day Monday, ending at its lowest price since October as favorable weather forecasts fuel talk of a record crop. Nearby July corn ended down 6 3/4 cents to $3.33 3/4 bushel. The market broke below the previous bear-market low of $3.35, maintaining the bearish technical momentum that has driven the market in its current slump. The key bearish factor, were weather forecasts calling for dry weather across the U.S. corn belt this week. That is exactly what farmers need at the end of a June that dumped excessive rains in many areas. Along with the dry weather, moderate temperatures are expected, which eases any concern traders might have about a heat wave stressing the crop during its pollination period, which typically kicks into gear in July. Pollination is a crucial period during the crop's reproductive cycle that establishes its yield potential.

After a fast start to the growing season, more traders are now talking about yields exceeding last year's record of 164.7 bushels per acre. The U.S.D.A. recently projected a national yield of 163.5 bushels per acre. The current perception in Chicago is that all is well, and that a 170-bushel crop is all but in the bin.