December corn expected summer-fall high – 05/13/2022

December corn is trading near the expected June/December high assuming the May new crop US corn supply/usage forecast balance published by USDA on May 12. We have included a scatter study displaying the June December high for December corn as a function of the US corn carryout as a % of crop year corn FSI usage plus exports. The ratio calculates to 15% based on the May 12 WASDE data.

The most likely deviation in  the actual corn balance from the current USDA projection is production. which is dependent on summer weather in the US Corn Belt.   As an extreme example, a repeat of the drought of 2012 would cut the US corn crop by roughly two billion bushels and result in a negative carryout which would require triple  digit corn prices to ration scarce supplies.

S/D table based on May 2022 WASDE Report.