With a favorable weather outlook over the U.S. corn belt, the maize-related exchange traded fund has been plunging over the past month as traders anticipate a potential bumper crop year.
The Teucrium Corn Fund (NYSEArca: CORN) has declined 6.7% over the past month and fell 14.1% since its April 29 high.
Corn futures have dipped to $4.395 per bushel, decreasing over 20% in the past year after the U.S. Department of Agriculture forecast a record harvest of 13.935 billion bushels in the season starting Sept. 1, Bloomberg reports.
The USDA has also rated three-quarters of the US corn crop as “good” or “excellent,” the best outlook for this period of the year since 1999.
The recent rains have helped ameliorate drought conditions in the Midwest. For instance, about 57% of Iowa was suffering from drought three months ago, but now, only 6% of the state is in a drought, reports Gregory Meyer for the Financial Times.
“It’s basically perfect right now,” Matt Dennis, partner at O’Neill Grain, said in the FT article. “Growing conditions, they don’t get a whole lot better.”
While some may argue that the excessive rainfall could damage crops, most areas are in their comfort zones.