Didion Weekly Market Recap
Favorable weather, lower export sales and option expiration weighed heavily on the markets last week, particularly the old crop. July futures ended the week 15 cents lower while September and December futures ended the week 3 and 2 cents lower respectively. The funds are short 194,143 corn contracts and long 48,071 soybean contracts.
Recent weather and favorable forecasts continue to build yield in the minds of the trade as rain remains stacked back-to-back over the next 10 days in the Midwest. The drought monitor continues to show improvements in drier areas as we officially enter summer. Warmer temperatures across the Midwest over the last 5 days should help improve crop conditions in Monday afternoon’s report.
Late last week the tensions in Iran had investors selling stocks and buying oil. Over the weekend the U.S. engaged in the conflict in the Middle East by dropping 14 GBU 30,000 lb. “bunker busters” from stealth B-2’s and also launched 75 precision guided Tomahawk missiles from Naval Assets in the region into Iran’s nuclear facilities at Isfahan, Natanz, and Fordow. The Fordow facility was the main target of concern given its installation deep within a mountainside making it not reachable for most military capabilities. The U.S. “bunker busters” were designed for such scenarios, and given the failed negotiations over Iran’s nuclear program, the Trump Administration made the decision to piggyback Israel’s substantial military campaign and complete the destruction of Iran’s nuclear capabilities.
Iran is OPEC’s third largest producer with roughly 3.4 million barrels of oil per day of capacity. That figure accounts for roughly 4-5% of global production. Of those 3.4 million barrels, approximately 1.7 million barrels is exported with China being a major importer of Iranian crude. Of equal concern is the Strait of Hormuz, a 21-mile-wide stretch of water between Iran and Oman that connects the Persian Gulf to the Gulf of Oman and eventually the Arabian Sea. The actual shipping lane for inbound and outbound ships is only 2-3 miles wide and yet over 20% of the global oil production passes through this lane every day. Iranian parliament has apparently voted to close the shipping lane in response to the U.S. strikes. This should send crude oil higher if maintained for any length of time.
Weekly crop conditions showed 72% of the corn crop in the Good/Excellent category, which is the same as a year ago and 5% above the five-year average. I look for conditions to improve again this week based on last week’s weather. just below the five-year average and 3% behind last year.
Given the news around the bombings by the US over Iran, there is a lot of interest in how the markets will open Monday when US traders enter the markets. Most analysts feel that the tensions and potential attacks have already been built into the markets, and we will see a minimal response. As of Sunday night, crude oil was up $2 while the grain markets remained flat. Historically the Crude oil and Corn markets trend the same direction so it will be interesting to see if crude can pull the markets higher in this environment. My expectations are for the markets to start the week of on the downside as crop growing conditions will trump any news out of Iran.
Upcoming reports
| Date | Report |
| 6/30/2025 | Acreage/Quarterly Stocks |
