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Front-month corn futures finish at record high

SAN FRANCISCO (MarketWatch) – Front-month corn futures closed at a record high Thursday, though gains were limited by disappointing export data and some long-awaited rain in the Midwest. Corn for delivery later in the year inched lower.

Corn for September (CU2) , the front-month contract, added 13 cents, or 1.6%, to settle at $8.08 a bushel on the Chicago Board of Trade, after settling Wednesday at $7.95 a bushel and reaching as high as $8.17 intraday.

Corn for December (CZ2) , which is more actively traded, slipped 6 cents, or 0.7%, to settle at $7.79 a bushel, after reaching $7.99 and closing Wednesday at $7.84 a bushel.

"We tested $8 corn today for the first time, which is a big psychological resistance area. We were unable to get through it so we're seeing a natural pullback," said Ted Seifried, senior market strategist at Zaner Group, referring to the December futures.

Still, Seifried said it's likely corn for delivery in December will try to reach $8 again within the next week.

"If we fail at $8 a second time, that might end up being the ceiling for corn – just as $5 seems to be the floor," he added.

Retreats in corn futures Thursday from intraday highs followed a U.S. Department of Agriculture report that showed corn exports falling 82% from the previous week and 77% from the four-week average.

In addition to lackluster export sales data, said Seifried, beneficial rain over a portion of Iowa, Northern Illinois, Ohio, and Indiana ended the continued deterioration in corn conditions in those areas, weighing on futures prices.

Further, corn and soybeans have been following the same trend due to drought concerns, said Seifried. Soybeans are currently going through pod-set, a very moisture-sensitive time frame which drives the yield, he added.

Soybeans for November delivery (SX2) rose 32 cents, or 2%, to $16.52 a bushel.

"It is hard to say who is following who. I do think that if soybeans have another weather-related bull run that corn will follow to an extent. However, as we saw from today's trade, corn is seemingly becoming less interested in following soybeans into uncharted territory," said Seifried.