On September 13, the price of corn futures increased amid a forecasted low supply in the United States and Europe brought by hot and dry weather conditions.
In France, farmers are harvesting their smallest maize crop in over three decades, which highlights the huge toll that the summer drought has snatched on the region’s food supplies.
On Tuesday, French corn contracts were trading higher near their highest levels in almost three weeks.
The country is one of the bloc’s agricultural heavyweights. Yet, its agriculture ministry stated that its production of pig and chicken grain feed would plummet by 25.00% to 11.60 million tons. This forecast is the lowest output level since 1990.
Consequently, the adverse weather has cut harvests of almost all crops from last year and is anticipated to do the same this year, hence, threatening food prices to keep on soaring.
In July, consumer food costs jumped by 12.00% from the year-ago period in the European Union and the United Kingdom.
To satisfy the supply shortage, these regions import corn from Ukraine, but the war-torn nation’s production is also expected to tumble in half from the previous season.
The heat and dryness experienced by the continent throughout this summer are considered the worst drought in at least 500 years.
USDA WASDE corn forecast
In the US, the most-active Chicago corn futures traded higher by 0.10% to $6.96-½ a bushel on Tuesday’s Asian trading session and hovered near their highest levels since June 27.
The gains were buoyed by reduced production guidance from the United States Department of Agriculture’s monthly World Agricultural Supply and Demand estimates released on September 12.
The agency forecasted that corn output would plunge in the marketing year 2022/23 by 415.00 million bushels to 13.94 billion bushels. It is lower by 8.00% from last year’s 15.15 billion bushels record.
The decline in US maize output projection comes with a cut to the MY 2022/23 corn harvested acreage consensus as well as a reduction to the yield estimate.
