Financial Times writers Gregory Meyer and Javier Blas reported yesterday that, “Grain prices lurched higher as a widely publicised tour of drought-stressed US fields estimated corn and soyabean yields well below official forecasts…On Tuesday, September corn rose 1.4 per cent to $8.26½ per bushel on the Chicago Board of Trade, less than 20 cents below the contract’s all-time high.”
The FT writers added that, “Separately, Christopher Mahoney, head of agriculture at Glencore, said US corn production would probably be lower than the USDA’s current estimate of 273.8m tonnes (10.8bn bushels). Final output could drop to as low as 260m tonnes (10.23bn bushels), he warned.
“‘We have not seen [a drought-related problem] like this in the past,’ he told investors in a conference call, comparing the situation to ‘the Dust Bowl years of the mid-30s’.
“Mr Mahoney suggested corn consumers will need to ration more than currently envisaged by the USDA, particularly in the feed and export sectors.”
Meanwhile, Ian Berry and Own Fletcher reported in today’s Wall Street Journal that, “On Tuesday, corn reached a record closing high, and soybeans are only a few cents shy of all-time highs.”
Speaking recently to Brownfield Ag News, Purdue University Agricultural Economist Chris Hurt described some of the impacts higher corn prices will have on the livestock sector:
The U.S. Department of Agriculture is set to update its production estimates again on September 12.