Corn futures on the Chicago Board of Trade (CBOT) extended their decline on Monday, reaching the lowest level since mid-August 2025. The commodity has now posted six consecutive weekly losses, with prices falling more than 15% over the past 19 trading sessions. At the time of writing, corn was trading at $4.07 per bushel, deep in oversold territory.
Key Bearish Drivers
The primary catalyst for the sell-off has been the sharp decline in crude oil prices, which fell to three-month lows after the US and Iran signed a memorandum of understanding to reopen the Strait of Hormuz. Brent crude dropped below $74 per barrel, while West Texas Intermediate (WTI) slipped to $69, erasing gains from earlier this year. As oil prices retreated, demand for corn-based biofuels weakened, removing a key support for the grain.
Additionally, favorable growing conditions across the US Corn Belt and expectations of bumper harvests from top South American producers—Brazil and Argentina—have weighed on prices. The USDA's latest World Agricultural Supply and Demand Estimates (WASDE) report raised global corn inventory projections for the 2026/2027 season above trade expectations, further pressuring futures.
Technical Analysis Points to Oversold Conditions
Corn's daily chart reveals a bearish death-cross pattern formed two weeks ago, when the 25-day exponential moving average (EMA) crossed below the 50-day EMA. The relative strength index (RSI) has fallen to 24, firmly in oversold territory. Historically, such readings often precede a short-term corrective bounce, but the broader trend remains bearish.
Immediate support is seen at $4.06 per bushel, with a potential trading range between that level and resistance at $4.17. A breakout above $4.17 could see prices test $4.22, but further downside may activate the psychological $4.00 level. The ongoing weakness in crude oil and ample supply expectations suggest that any rally may be limited.
Market Context
The recent slump in corn prices mirrors broader soft commodity weakness, as Wall Street banks slash Brent forecasts amid a looming supply glut. The normalization of Hormuz flows has been faster than anticipated, reducing geopolitical risk premiums across energy and agricultural markets. For corn, the biofuel demand link to oil remains a critical factor to watch.
Investors should monitor upcoming USDA crop progress reports and weather forecasts for any shifts in supply expectations. While oversold conditions may attract bargain hunters, the fundamental picture suggests that bears will remain in control in the near term.
This article is for informational purposes only and does not constitute financial advice.
