The July contract set lifetime lows in early trading when it plummeted to just above $2 a bushel. Nearby prices haven't fallen below $2 since early January.

The market was reacting to persistent rains that fell on the areas of farm country where moisture was needed to help with crop development, particularly Iowa and Illinois. "If rainfall increases, crop conditions improve and prices fall," said Jim Bower, a grain broker and analyst with brokerage firm Bower Trading in Lafayette, Indiana.

Nearby July corn futures fell 4.5 cents to settle at $2.0325 a bushel, the lowest settlement for a nearby corn contract since December 16. Midwest weather worries continue to drive the futures market in Chicago. Many traders are confident that these beneficial rains will help the US produce a near-record corn crop this year. Growers produced 9.437 billion bushels of corn last year. The Department of Agriculture pegs this year's corn crop to top that by 303 million bushels at 9.74 billion bushels. Projections for a bountiful US corn crop and lacklustre demand will keep prices under extreme pressure through the fall harvest, analysts said. "We won't see even a small price rally in the corn market until the water is completely shut off," Bower said. "It would take a weather disaster to move these prices higher." According to recent weather forecasts, that doesn't appear to be happening.

Private forecasters are calling for above-normal precipitation next week, with the Midwest farm country the prime target. "When you couple the forecasts calling for more rain over the next six to 10 days with recent heavy rainfall, it makes for an extremely bearish market," said Steve Bruce, a CBOT grain trader with ED&F Manhattan. The downpour overnight drenched critical crop regions in Iowa. There were local reports that some farms received around 3 inches.

(The Wall Street Journal)