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Corn at its Highest for 8 years, Buoyed by Poor U.S. Weather Conditions

April 22, 2021

Chicago corn futures gained more ground on Thursday, with prices jumping to a new eight-year high as cold weather in the United States and declining crop conditions in Brazil raised worries over global supplies.

Soybeans rose to their highest since June 2014, gaining 1.3, meanwhile wheat was up for a third consecutive session.

The Chicago Board of Trade (CBOT) front-month corn contract rose 0.9% to $6.31-1/4 a bushel , having climbed earlier in the session to $6.32 a bushel, the highest since mid-2013.

Soybeans were up 1.3% to $14.98-1/4 a bushel, the highest since June 2014, and wheat added 0.7% to $6.80 a bushel.

The cold weather in the United States could slow the germination of newly seeded corn. The U.S. Department of Agriculture said the U.S. corn crop was 8% planted as of Sunday. Brazil’s heavily exported second corn crop has been on the markets’ radar since last year, when the country’s soybean crop was planted later than usual, increasing the chances that corn would go in late since it is planted immediately after the soy harvest.

Crop conditions have already plunged in No. 2 producer Parana, which grows 15% of Brazil’s second corn crop. As of Monday, just 62% of the southern state’s corn was in good condition, down from 76% a week earlier and 92% the prior week.

Higher prices are expected to curb demand.

China issued guidelines on Wednesday recommending the reduction of corn and soymeal in pig and poultry feed, a measure that could reshape the flow of grains into the world’s top corn and soybean buyer. China consumes about 175 million tonnes of corn in animal feed each year and imports close to 100 million tonnes of soybeans.

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