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Corn Prices Hit 9-Year High

Contracts for corn futures were trading above $8/bushel

2 Lisa Selfie December 2020 Headshot

Chicago Board of Trade (CBOT) corn futures exceeded $8/bushel for the first time in almost a decade and are approaching a record high as war continues to threaten global supplies and chilly U.S. weather pushes spring planting.

According to CNBC, the contracts for July corn futures were trading above $8/bushel on Monday, the highest level since September 2012. The contracts were trading near $6/bushel at the start of the year.

Both the U.S. Department of Agriculture (USDA) and United Nations recently cut their outlooks for Ukrainian corn shipments. Ukraine is shipping some commodities by rail, but exports abroad are limited because ports remain largely shut by the war.

The supply constraints are expected to persist into the 2022-23 season, with Ukraine’s grain association projecting the corn crop to sink 39% from last year.

Traders worry chilly weather will slow U.S. crop plantings this spring and potentially reduce yields at harvest time in this fall.

Forecasts show “only brief open windows for Midwest planting” through month’s end, Rich Feltes, head of market insights for broker RJ O’Brien, told Al Jazeera.

U.S. corn planting was 4% complete as of Sunday, below the five-year average of 6%, the U.S. Department of Agriculture said in a report issued after CBOT grain markets closed on Monday, and the 5% forecast in a Reuters poll of analysts.

In addition to the global supply concerns, corn also has a potential source of additional demand.

Last week President Biden announced plans to lift summertime restrictions on E15, allowing the 15% bioethanol blend to be sold year-round.

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