(Bloomberg) — Grain prices have fallen to their lowest level since the pandemic as Tropical Storm Beryl is expected to bring rain to the Midwest, potentially helping productivity at a critical time for crop development.
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The Bloomberg Grains subindex, which tracks corn, soybean and wheat futures in Chicago and Kansas, extended this year’s losses to 17%, trading at the lowest level since December 2020. That is the worst performance among the major grain groups. commodities, with energy and metals indices rising in 2024.
It’s a complete reversal of the post-pandemic recovery that saw cereal prices more than double by 2022, fueling food inflation across the world. The increase, which had been driven by crop losses and disruption caused by the war in Ukraine, has since faded due to a recovery in production and slower growth in demand, including from China. The trend toward more comfortable supply is expected to continue, with North American farmers currently on track for a bumper harvest this year.
U.S. corn and soybean harvests are in their best shape in four years this season, according to the latest data from the U.S. Department of Agriculture. Conditions are expected to remain favorable over the next few days, with Beryl – which made landfall in Texas as a hurricane on Monday morning – bringing rain to the central and eastern Midwest this week.
“Friendly weather for row crops has provided the recipe for a sell-off across grain and oilseed markets, with few buyers stepping in to slow the momentum at this time,” said Arlan Suderman, chief commodities economist at StoneX Financial Inc., in a note to customers. .
Corn futures for December delivery fell as much as 4.3% to $4.0575 per bushel. Soybeans for November fell as much as 3.1% to $10.9425 a bushel. Both commodities traded at their lowest level since November 2020.
Crop prices were also pressured by weak global demand. U.S. exports have lagged, with importers from top commodity buyer China opting to buy from rival Brazil, where a weaker currency is boosting soybean sales. Meanwhile, North American corn producers have held the largest grain reserves on their farms since 1988, thanks to high production costs and low prices.
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