Corn boosts cargo to near decade high as war turns supply on its head

Corn returned to its highest price since 2012, extending gains to $8 a bushel as war in Ukraine threatens its ability to ship and seed grain and weather slows early US planting.

Chicago futures are poised for a third straight session, heading for the longest rally since the Russian invasion began. The country is regrouping its armed forces for renewed attacks in eastern and southern Ukraine. The conflict has shaken grain trade from the Black Sea region and could prevent Ukraine from shipping about half the corn it was supposed to sell this season before war broke out.

Buyers will likely look to the US for supplies, but the initial pace of planting is slightly behind the five-year average. The country sows its crops until May, allowing time for improvement. China also faces seeding challenges due to coronavirus restrictions.

“Cool, blustery conditions are spreading across the upper Midwest,” the US Department of Agriculture said in a weather report on Wednesday. “Meanwhile, warmth remains in the eastern corn belt, although isolated showers and wet fields continue to prevent most field work.”

Corn futures on the Chicago Board of Trade rose a whopping 0.6% to $7.83 a bushel, the highest since September 2012 for one of the most active contracts. Soybeans also gained.

“The $8 level will be more of a speed bump than a roadblock” if there are any real weather issues, according to Tobin Gorey, soft commodities strategist at the Commonwealth Bank of Australia. Futures will pierce this “mythical” level sometime in the northern spring and summer, he said.

Wheat stabilized after four consecutive gains, while milling wheat in Paris neared an all-time high.

The recent purchase by the largest wheat buyer, Egypt, exposed the staggering costs importers are facing as a result of the war. Prices have risen 44% since mid-February in a Wednesday bid, just ahead of the Russian invasion of Ukraine. The large volume bought even at such a high cost signals Egypt’s urgency to build up reserves.

Bloomberg Corn boosts cargo to near decade high as war turns supply on its head

Fry Electronics Team

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