Jack Scoville, market analyst with Price Futures Group, said corn market outlooks “remain muted” as U.S. corn demand lags behind expectations and South American outlooks still look good.

“Corn is still finding some support on a lack of farmer selling,” Scoville said. “Weak demand overall for U.S. corn remains a big problem for the market.”

Brazilian and Argentinian forecasts are for lighter rains, compared to the earlier predicted big rains.

The South American soybean crop is dealing with more stress than corn, Scoville said, as the drier forecasts may start to drag on eventual supply. However, the expected supply was already so high, any decline will still be a very high yielding crop.

“Production potential for the Brazil is called very strong even with potential problems and losses in the south,” Scoville said. “Argentine production ideas continue to drop with the drought as planting is delayed and the crops already in the ground are stressed.”

Despite persisting drought worries in Argentina, the market’s concern about Chinese demand is canceling out any supply issues the countries may have. If the Chinese economy starts to see recovery, the cheaper South American crop will be the first to see the benefit.

“China is now moving rapidly to open the economy and allow people to move around with no lockdowns so the demand could start to improve,” Scoville said.

He noted China appears to be opening up more as demonstrations by the population have led to easing COVID restrictions, and would lead to more demand for South American and U.S. product.