Brazil's presidential election may have given U.S. corn traders another reason to watch the May 2027 futures contract. Following Sunday's election, the Brazilian real plunged against the U.S. dollar, potentially making Brazilian corn more competitive in world markets. With May corn already in a daily downtrend and a historically bearish seasonal period approaching, could the weaker real add pressure and push prices toward new contract lows?
According to Reuters, the Brazilian real lost more than 11% against the U.S. dollar in early Monday trading after President Luiz Inácio Lula da Silva was reelected. A weaker real allows Brazilian exporters to offer corn at more competitive dollar prices while receiving more local currency for their sales.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
This development is particularly interesting for May corn futures. Futures markets are forward-looking, and the May contract trades during the latter portion of Brazil's first corn harvest, which generally runs from January into April or May. Currency weakness could also influence expectations for future global corn supplies.
Technical: May Corn's Broadening Formation
On the accompanying weekly chart, May 2027 corn futures have developed a broadening formation since April 2025. This pattern features increasingly wide price swings, with the market establishing higher highs and lower lows.
The recent rally carried May corn to a new contract high of $5.70¼ per bushel before reversing sharply lower. Prices have since retreated toward the contract low of $4.50¼, with Monday's close near $4.76¼.
The sell-off from the recent contract high has turned the daily trend down. While broadening formations don't guarantee future price direction, seasonal weakness and bearish fundamentals suggest the contract low could become an important downside target.
Another decline toward $4.50¼ would bring May corn futures back to their contract low and the lower boundary of the broadening formation.
Source: Barchart
A Seasonal Pattern Worth Watching
According to Moore Research Center, Inc. (MRCI), May corn futures have demonstrated a historically bearish seasonal tendency between approximately November 1 and November 19.
Over the past 15 years, a hypothetical strategy that sold May corn futures near the beginning of November and exited around November 19 was profitable in 13 of those years, an 87% historical success rate.
The study showed an average net profit of approximately $494 per standard 5,000-bushel contract, before individual trading costs. Interestingly, four of the 15 hypothetical trades experienced no adverse daily closing equity drawdown.
This seasonal window is approaching as May corn futures trend lower and near their previous contract low.
As a reminder, seasonal patterns can offer valuable insights, but they should not drive trading decisions. Traders must consider technical and fundamental indicators, risk management strategies, and market conditions to make informed, balanced trading decisions.
Source: Moore Research Center, Inc. (MRCI)
Source: MRCI
Fundamentals Continue to Pressure Corn
The USDA's September 30 Grain Stocks report and October World Agricultural Supply and Demand Estimates (WASDE) report added to the bearish fundamental picture.
The October WASDE increased projected U.S. corn production to approximately 16 billion bushels and raised expected ending stocks by 282 million bushels to 1.85 billion bushels.
Larger supplies, combined with potentially more competitive Brazilian exports, could make it difficult for U.S. corn prices to sustain a meaningful recovery.
Assets to Trade the Corn Market
Source: MRCI
Although December is currently the front-month corn futures contract, May 2027 has sufficient trading activity to warrant consideration.
Friday's trading saw 52,273 May contracts change hands, with open interest at 185,287 contracts.
Traders have several ways to participate in the corn market:
Standard corn futures (ZC): 5,000 bushels per contract.
Mini corn futures (XN): 1,000 bushels per contract.
Micro corn futures (CE): 500 bushels per contract.
Options on corn futures: An alternative offering defined-risk strategies for option buyers.
Teucrium Corn Fund (CORN): An exchange-traded fund providing exposure to corn futures without requiring a futures account.
Liquidity, leverage, and risk vary considerably among these instruments.
In Closing...
May corn futures are entering an interesting period as several bearish influences converge.
A weakening Brazilian real, larger U.S. corn supplies, a declining daily trend, and a historically bearish November seasonal pattern all suggest the contract low near $4.50¼ deserves attention.
It remains uncertain whether prices will establish another contract low. However, when technical, seasonal, and fundamental factors begin pointing in the same direction, traders have good reason to pay attention.
As always, risk management should remain a priority.
On the date of publication, Don Dawson did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
May Corn Futures: Is Another Contract Low Coming? Corn Prices Just Hit Their Most Oversold Level in 2.5 Years as Bulls Bet on a Rebound How Were Monday Morning Headlines Tied to the Global Coffee Market? Bears Are in Charge: Why Soybean Meal Prices Look Set to Head Lower