Corn Prices Soar to Three-Year High Amid El Nino, Geopolitical Tensions
Corn prices have reached their highest level in three years due to the El Nino weather event, dry conditions, and geopolitical risks. The global price of corn rose to $5.2425 per bushel in recent markets, surpassing its previous peak of $5.2450 on July 31, 2023.
According to Zafer Ergezen, a futures and commodities expert, El Nino's effects began to be seen in June, particularly in South America, Southeast Asia, and Australia, with a somewhat lesser impact in the US and Europe. The phenomenon is also having a significant effect on West Africa, where there are concerns over declining corn yields.
The combined effects of El Nino and high oil prices have driven up corn prices, with around 60% of global production being used for industrial purposes. As long as oil prices remain at these levels and there isn't a lasting peace deal between the US and Iran, Ergezen doesn't expect a significant pullback in corn prices.
The hot and dry weather in some US corn-producing regions, along with adverse weather conditions in Europe and ongoing grain shipment disruptions in Ukraine, are fueling concerns over global corn supplies. The narrowing margin for offsetting additional supply shocks due to high energy and fertilizer costs is also contributing to the price increase.