Corn nears record high, wheat surges on crop supply concerns

Corn futures in Chicago exceeded US$8 a bushel for the first time in almost a decade, approaching a record high as war threatens global supplies, boosting demand for U.S. grain.

Corn futures in Chicago exceeded US$8 a bushel for the first time in almost a decade, approaching a record high as war threatens global supplies, boosting demand for U.S. grain. 

The most-active July contract rose 3 per cent to US$8.07 a bushel in Chicago with the conflict in Ukraine showing no signs of easing as Russian forces attacked Mariupol overnight. Futures are nearing an all-time high of US$8.49 a bushel reached in 2012 after devastating drought and heat damaged crops in the U.S. Midwest. Wheat contracts surged as as cold and snow slowed planting.

The global outlook for corn supplies has taken a hit as Russia’s invasion of Ukraine disrupts farming and trade flows in a region responsible for about a fifth of exports. Not only that, but spring planting is also a worry now. That comes on top of a surge in fertilizer costs that’s dimming planting prospects in the U.S., the world’s top shipper. Demand is increasing as well. The U.S. Department of Agriculture reported multiple sales this month of American corn to China exceeding 1 million tons.

“People are also watching closely China’s economy, COVID lockdowns and demand for commodities, especially corn”, Naomi Blohm, senior market adviser at Total Farm Marketing in West Bend, Wisconsin, said in a note on Monday.

Ukraine’s next corn crop could fall almost 40 per cent from last year, a local grain association said earlier this month. U.S. farmers are poised to plant more soybeans than corn for just the third time ever as record fertilizer prices prompt growers to turn away from the cost-intensive grain.