The United States, the world's largest corn producer, is grappling with a severe drought that has severely impacted crop conditions, driving corn prices upwards. Chicago futures have experienced their most significant surge since early 2022, rising over 12% in four sessions because of heat and prolonged dryness in critical Midwest growing areas. The proportion of the US corn crop rated good to excellent now stands at its lowest level for this time of year since 1992, plummeting to 55%.
Illinois, the second-largest corn producer in the US, has been particularly affected, with only 36% of the state's crops receiving a good to excellent rating, reflecting a significant drop from the previous week. The situation shows little sign of improvement, with dryness and stress projected to persist across southern, central, and northeastern regions of the corn and soybean belt, according to forecasts by Maxar Technologies Inc. Wheat and soybean futures have also witnessed an upward trend due to weather-related concerns.
The soaring corn futures for December delivery reached their highest point since November, despite disappointment caused by the Environmental Protection Agency's announcement regarding biofuel quotas. The news prompted a sharp decline in soybean oil futures, while soybean meal prices increased due to anticipated reductions in crushing activity. Market volatility is expected to heighten further with the upcoming release of the US Department of Agriculture's annual acreage report, which will shed light on planted areas. Uncertainty looms as farmers brace for potential yield losses and weather-related challenges until mid-August.
Source : wisconsinagconnection