European Corn Drought Triggers Widespread Import Demand
The drought in Europe is having a significant impact on corn production, leading to decreased estimates and increased imports.
According to the European Commission's cereals market situation update, seeded area for corn has been cut from 8.2 million hectares (mha) in June to 7.5 mha due to dry conditions, resulting in a drop of 11.1% below last year and 13.1% below the five-year average.
Yield was lowered by 6% from last month, taking it to just 3% below last year and 2% below the five-year average.
The European Commission estimated corn production will fall to 51.9 million metric tons (mmt) from 60.2 mmt last year, which would be the smallest corn crop for the EU since 2007.
In response to the decline in production, the European Commission increased its estimate for corn imports to 24 mmt from 19 mmt last month, which would already take out the 2018 record of 23.6 mmt.