Corn and wheat prices at a high of more than three years – the reasons for the increases are different
Corn and wheat prices have reached three-year highs due to distinct factors. Wheat is surging amid the escalation of the war between Russia and Ukraine, while corn is rising due to lowered US yield forecasts.
Corn and wheat prices have risen to their highest levels in more than three years, but the forces driving them up are fundamentally different. Wheat futures on the CBOT (Chicago Board of Trade) rose yesterday by 3.1% and closed at a price of 784 cents per bushel (about 35.24 liters), after reaching a peak of 790.25 cents – the highest level since February 14, 2023. This refers to the contract for December 2026. The price of wheat jumped by 12.1% in the last week, the largest weekly increase since March 2022, and in total has risen by more than 54.5% since the beginning of the year, against the backdrop of the escalation in the war between Russia and Ukraine and disruptions to traffic in the Black Sea.
At the same time, corn futures on the CBOT rose yesterday by 0.6% and closed at a price of 536.5 cents per bushel, after reaching a peak of 541.25 cents – the highest level since July 28, 2023. In this case, too, it is a contract for December 2026. Corn rose by 5.5% in the last week and by 15.6% in August, and it is on its way to its strongest month since April 2021. Since the beginning of the year, its price has risen by 21.8%, against the backdrop of expectations for tighter US supply and strong demand, while the reduction in exports from Ukraine adds pressure to global supply.
"From the beginning of August until now, the consensus in the market is that there is less supply than we thought at the beginning of the month," said William Osnato, director of research and analysis at the company Barchart.
The World Agricultural Supply and Demand Estimates (WASDE) report from the US Department of Agriculture lowered the corn yield forecast by more than traders expected, despite a forecast for the second-largest yield ever. The forecast was cut by 2.3 bushels per acre, to 180.7 bushels per acre. The results of the Pro Farmer's Crop Tour also added to the concerns, as the tour found that extreme heat in July damaged the crop following unusual rains in many areas of the US in June.
