European Drought Sparks Corn Import Surge from North America

A severe drought in Europe is expected to have a significant impact on corn production, leading to increased demand for imports from North America.

The European Commission has revised its corn production estimate downward, citing dry conditions and lower yields. The seeded area was cut by 11.1% compared to last year's levels, and the yield was lowered by 6%. This suggests further declines in yield and total production are likely.

The EU's estimated corn production will fall to 51.9 million metric tons from 60.2 mmt last year, making it the smallest corn crop for the EU since 2007. The European Commission has also increased its estimate for corn imports to 24 mmt from 19 mmt last month.

The drought in Europe is not only affecting domestic production but also disrupting global trade flows. Ukraine's exports are at risk due to the conflict with Russia, and the EU may turn to North American suppliers to meet their growing demand. As of July 23, total U.S. corn export commitments to the EU stood at 7.628 mmt for the 2025-26 marketing year.

The technical analysis suggests a significant upside potential ahead, with a measured move equal in size to the old channel range leaving an objective of 279 euro/mt. A bull pennant is also being formed, with a measured move for the pennant roughly at 308 euro/mt.