While the last of the U.S. corn crop is being planted, many are breathing a sigh of relief—thankful for the record-setting planting pace the mild spring has allowed. Meanwhile, corn futures plummeted Tuesday amid the early optimistic signs of a record crop.

The red-hot planting pace and crop condition thus far are taking their toll on corn prices. Tuesday, the July contract was down 36 cents, closing below the $6 mark.

USDA’s crop condition rating issued Monday came in higher than expected at 77 percent good to excellent. “Trade was anticipating something in the 70 percent to 72 percent range,” says Marty Foreman, Doane senior economist. “It looks like this has triggered additional selling by funds.”

Tuesday’s weakness was led by the July contract, Foreman says. “In addition, spot basis levels have weakened which is tied to the July contract. These factors, along with traders unwinding long July/short December spreads, are putting additional pressure on the July contract.”

But will the lower price levels set a lasting trend? While the early signs are for a record-setting corn harvest, there is a long summer ahead and dryness is already a concern, especially along the Ohio River Valley. Add the low inventory levels of old crop corn with the uncertainty of adequate rainfall and volatility will likely remain a factor. “The combination of tight old-crop stocks and some dryness are clearly key ingredients for a volatile market,” Foreman says.

Rain totals for the Sunday through Tuesday period will be important as well as the weather forecast following the upcoming Memorial Day weekend. “The trade will be monitoring weather forecasts closely now because topsoil moisture levels have turned slightly dry across a fairly wide area of the Corn Belt from Kansas and Missouri across Illinois, Indiana to Ohio,” Foreman says. “Little rain is forecast until early next week followed by another dry period.”

China, which also is facing some early season dryness in key growing areas, will be an important part of the long-term outlook, according to Foreman. “They tend to step in and buy on weakness so they are a long-term supportive factor for corn prices.”