Corn futures on the Chicago Board of Trade reached a one-year high on Wednesday, propelled by firm export demand and concerns about weather across the U.S. corn belt.
CBOT July corn closed 2-1/4 cents higher at $4.77-3/4 per bushel, reflecting a market that is responding to multiple supply-side and demand-side signals.
Traders and analysts pointed to expectations that planting could be scaled back because of high fertilizer costs, a factor that has provided additional upward pressure on prices. While early U.S. soybean and corn planting has been progressing, forecasts of storms in parts of the U.S. Midwest introduced the possibility that seeding may be postponed in certain locations.
Forecasters expect Midwest rains to ease by mid-week, a projection that suggests any planting delays may be short-lived and that farmers may not face extended interruptions to seeding schedules.
Energy markets also played a supporting role. Crude oil prices rose more than 6% on Wednesday to their highest level in nearly a month. Higher oil values have a direct connection to corn markets because corn is used as a feedstock for biofuels; when crude strengthens, demand for biofuel feedstocks can rise, lifting grain values.
Market participants have additionally factored in how geopolitically sensitive negotiations can ripple through energy supplies. In this instance, stalled U.S.-Iran talks were cited as a contributor to concerns about continued disruptions to Middle Eastern supply, which supported crude and, by extension, corn.
The interplay of export demand, input-cost-driven planting expectations, short-term weather risk and a firmer oil complex combined to push CBOT July corn to the one-year high observed on Wednesday.
Sectors impacted:
- Agriculture - commodity pricing and planting activity
- Energy - crude oil and biofuel feedstock demand
- Commodities - grain markets and export flows