Surging grain costs last year forced Cargill Inc. and other meat producers to close plants and ethanol makers including Valero Energy Corp. to shut distilleries, easing demand for corn supplies curbed by the worst drought since the 1930s. The USDA says output will rebound as farmers plant the most acres in 77 years. Futures fell 25 percent from their peak in August, joining wheat and soybeans in bear markets as global food costs tracked by the United Nations fell for five consecutive months.

“The corn-supply situation has gone from being underwater to having its head above water,” said Roger Fray, the executive vice president of grain at farmer-owned grain handler West Central Cooperative in Ralston, Iowa, who expects cash prices to drop 20 percent by December. “We have enough supply until what should be a record harvest.”

Eoin Treacy's view Grain and bean prices pulled back sharply on March 28th following a USDA report highlighting the fact that growing conditions and stockpiles were not as dire as previously expected. As more news emerges and as growing conditions look promising, this has had a negative effect on sentiment.

While there is scope for an unwind of corn's short-term oversold condition, a sustained move above 730¢ would be required to question medium-term potential for additional lower to lateral ranging, subject to improving crop news.