$7 Corn Becomes a Real Possibility as Global Supply Tightens
Corn prices have been rallying rapidly since August, with some analysts predicting $6 corn by year's end. However, if there are any issues in Latin America due to a potential super El Niño, prices could surge even higher to $7.
The rally is being driven by shrinking U.S. yield prospects, tightening global supplies, and rising geopolitical risk out of the Black Sea. World wheat production among major exporters is down 47 million metric tons from last year, while corn production is down another 50 million metric tons.
Fund positioning has accelerated the pace of price swings dramatically, with daily ranges expanding and the market leaning toward a smaller crop than currently estimated. Analysts Dan Basse and Chip Nellinger say there's still a window for livestock producers to act and cover their feed needs, but it means being ready to move on any dip.