April 20, 2022

CBOT corn futures roared to a nearly decade-high earlier this week as traders assessed ongoing supply concerns and global disruptions precipitated by the Russia-Ukraine war.

On Monday, July corn futures eclipsed $8 per bushel, the highest level since September 2012. July corn was trading at around $6 per bushel towards the beginning of 2022.  

The ongoing conflict in Ukraine has exacerbated upward price pressure for corn, along with many other agricultural commodities. Ukraine is a major exporter of items including wheat and barley. Russia’s largest exports include oil and gas, in addition to chemicals used in fertilizer.

Mounting concerns over higher input costs amid stalled trade in the Black Sea Region are fueling market volatility as the war rages on. 

The uptrend in agricultural commodities prices predated the Russia-Ukraine war. Logistical issues, higher transportation costs, and inflationary pressures are pushing prices higher. Last month, inflation in the United States hit a fresh 41-year high of 8.5%, according to the U.S. Bureau of Labor Statistics. Traders are also eyeing weather conditions as drought in the western U.S. and South America persists. 

Some farmers in the United States have had to delay their plans to plant by several weeks due to cooler temperatures, rain, and snow. As of Sunday, USDA said that 4% of the nation’s corn crop had been planted, lagging the 5-year average by 2%. 

Corn prices on the CME retreated on Tuesday. However, July closed just ¼ cent below $8 per bushel. Sharply higher feed and energy costs are raising production costs for livestock producers across the nation. Meanwhile, U.S. poultry and hog farmers are contending with disease and virus issues. 

Nearby corn futures rebounded in overnight trading and were last up by 1 to 2 cents a bushel. 

Photo Credit:  Fotokostic / Shutterstock.com

Courtney Shum
Urner Barry
1-732-240-5330
cshum@urnerbarry.com