Darin Newsom

Wed, Jun 25, 2025, 8:29 AM4 min read

1. Overnight through early Wednesday morning saw the figurative wheels fall off the corn market as the December 2025 issue fell to a new contract low.

2. From a structural point of view, the extended selloff indicates the commercial side is growing more comfortable with expected supplies in relation to expected demand (NOT USDA BASED).

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3. From a long-term investment point of view, positions haven't changed much.

During one of my recent road trips, I tuned into an oldies station and Kenny Rogers’ classic “Lucille” happened to come on. This is one of those songs when the parodies were better than the original, with one version changing the key lines to, “You picked a fine time to leave me, loose wheel”. What made me think of this pre-dawn Wednesday? A couple things: First, the news continues to remind us a screw is loose, or a nut has run amok, either way usually resulting in a wheel (or more) coming off. Second, looking at the corn market specifically, the wheels have literally come off leaving us with nothing but the red rocket wagon sliding down the hill. I’ll talk more about this momentarily. A look at today’s quote screen shows the US dollar index (USDX) gaining back some of Tuesday’s selloff, adding as much as 0.34 Wednesday morning. It’s interesting to hear the continued debate/arguing over what the next move by the US Federal Open Market Committee should be. Despite all the childish name calling in Washington, D.C., the Fed fund futures forward curve continues to show we shouldn’t expect any move until possibly September, with a possible hike creeping into the picture.

And now, the corn market. Let me begin by saying King Corn made a feeble attempt at rallying early in the overnight session as the December issue quietly added as much as 1.5 cents. But then, as mentioned in the open, the wheels fell off. After poking its head to a high of $4.3050, Dec25 (ZCZ25) fell to a low of $4.21, down 8.0 cents from Tuesday’s close. All this is well and good, and should be expected given corn’s Round Number Reliance, but as the late Paul Harvey would say, here’s the rest of the story: Recall when I talked about Dec25’s contract low of $4.28. That is gone now, with the next target the round number of $4.20, then $4.10, and the big round number of $4.00. What happened? Corn is a weather derivative, possibly the key weather derivative market in the Grains sector, and weather factors have come together in an equation that results in larger expected supplies. It really is this simple. If the market price is going down, in this case the December futures contract, it means the supply curve is shifting outward, an Econ 101 way of saying expected supplies are increasing in relation to expected demand. Again, not based on USDA’s imaginary numbers.