Market Overview: Corn (C)

During the last decade, Corn has been the leading crop in terms of production and acreage grown. The major producing nation for Corn in the world is the United States of America, with over 80% of the production of Corn in the United States centered in the mid-western states known as the Corn Belt: Iowa, Illinois, Nebraska, Minnesota and Indiana.

Seasonal Overview:

Tax selling of last year’s crop has tended to weigh on prices at the beginning of the year, culminating in one of the best known seasonal tendencies in the grain markets, the "February Break". In recent years, the February Break has been highly unreliable, but it is still worth noting. During the production cycle of the Corn crop, the predominant feature is fear that the crop will be damaged, thus reducing yields. An old grain traders saying is “Grain crops are killed 3 times a year”:

• Once during the spring when it is too hot/cold/wet/dry for planting or to emerge.
• Once during the summer on fear of too little rainfall for pollination (this is the potentially explosive rally in the summer).
• Once during the autumn on early frost or harvest delays.

After each of these killers, prices tend to break as the market worries about the coming supply. It is normally in the break from these lofty, panic-inspired levels that the trading opportunity lies.



Corn: (High: May-Jun//Low: Aug-Oct) After a post-harvest rally, market pressured by tax-related producer selling into "February Break." Spring rally begins wth March deliveries and focus on new-crop planting and weather. Seasonal peak often by June solstice. Market typically declines during July as crop is pollinated and matures. Seasonal low usually made going into October/November harvest.

Chart courtesy of Moore Research Center, Inc.