Corn rockets to 3-year high as traders eye lower US production

Chicago corn futures surged to a three-year high on Monday, following a tour by analysts last week that revealed US crops were in poorer condition than anticipated. Wheat futures also reached their highest level in two years due to ongoing tit-for-tat attacks by Russia and Ukraine, which continue to impede Black Sea port exports.

Soybeans experienced a decline, but were bolstered by robust demand for US exports. The primary corn contract on the Chicago Board of Trade (CBOT) rose 2.5% to $5.21 a bushel, marking the highest price since August 2023. Prices have increased by 12% this month. According to advisory service Pro Farmer, US 2026 corn production will significantly fall short of government predictions, after a tour of seven major production states uncovered subpar crops caused by adverse summer weather.

Furthermore, French grain maize crop ratings stabilized following a record-low, exceptionally hot, and dry summer, as per data from FranceAgriMer. Traders are also concerned about the potential impact of an El Niño weather event on corn production in Brazil. Nick Carracher, head of Australian consultancy Lachstock, stated that there is fundamental support underlying these developments.

Large speculators significantly increased their net long positions in CBOT corn in the week ending August 18, according to regulatory data. In other crops, CBOT wheat increased by 1.8% to $7.12 a bushel, reaching its highest level since May 2024, while soybeans fell by 0.4% to $12.34 a bushel. This month, wheat has gained around 12%, and soybeans 4%.

Continued export disruptions could further push wheat prices upward, according to Commonwealth Bank analyst Dennis Voznesenski. However, the size of the Black Sea region’s 2026 harvest is near record levels, he added. "A truce to refrain from attacking ports would trigger a rapid price correction."