Corn futures hit decade-high above $8 per bushel on global supply

War in Ukraine and cold weather in the US lead to forecasts of lower supply, driving grain prices higher.

Corn grows in a field near the Ruff Brothers Grain elevator in Leonore, Illinois, US
Corn prices have surged on cold US weather and disruption in supply from Ukraine [File: Daniel Acker/Reuters]

Chicago Board of Trade (CBOT) corn futures topped $8 a bushel and reached their highest price in nearly a decade on Monday on concerns over unfavourable United States weather and the Ukraine war disrupting grain exports.

Traders worry chilly weather will slow US crop plantings this spring and could potentially reduce yields at harvest time in the autumn. Forecasts show “only brief open windows for Midwest planting” through month’s end, said Rich Feltes, head of market insights for broker RJ O’Brien.

Already, planting is off to a sluggish start, with 2 percent of the crop seeded as of April 10, behind the five-year average of 3 percent. The US Department of Agriculture will issue an update on farmers’ progress in a weekly report at 3pm CDT (2000 GMT).

“It appears some corn will get planted before the end of April, but the war in Ukraine rages on,” said Dennis Smith, a commodity broker for Archer Financial Services in Chicago.

An aerial view shows a tractor spreading fertiliser on a wheat field near the village of Yakovlivka after it was hit by an aerial bombardment outside Kharkiv, as Russia's attack on Ukraine continues.
A tractor spreads fertiliser on a wheat field near the village of Yakovlivka, Ukraine [Thomas Peter/Reuters]

US grain production is particularly important this year because the war in Ukraine has thrown doubt on its plantings and stalled agricultural exports from the Black Sea region, a major global supplier of corn and wheat.

About 1.25 million tonnes of grains and oilseeds are still on commercial vessels blocked in Ukrainian seaports due to Russia’s invasion, and part of the cargo may deteriorate in the near future, Ukraine’s farm minister was quoted as saying on Friday.

Most-active corn futures Cv1 climbed as high as $8.03 a bushel at the CBOT, the strongest level since September 2012. By 10:10am CDT (15:10 GMT), the contract was up 18-3/4 cents at $8.02-1/2 a bushel.

CBOT soybeans Sv1 gained 24 cents to $16.89-1/4 a bushel, while CBOT wheat Wv1 jumped 28-1/2 cents to $11.33 a bushel and neared a four-week high.

Wheat futures recovered after the most-active contract Wv1 on Thursday posted its biggest decline in nearly two weeks. CBOT markets were closed on Friday.

Source: Reuters