Europe's Corn Crisis: Drought-Stricken EU Seeks North American Relief

Europe's corn production is facing significant challenges due to the ongoing drought, which has led to declining crop yields and reduced seeded area. According to the European Commission, corn seeded area was cut from 8.2 million hectares in June to 7.5 million hectares in July, a decrease of 11.1% compared to last year's seeded area. This reduction in production is expected to continue, with the European Commission estimating that corn production will fall to 51.9 million metric tons (mmt) from 60.2 mmt last year.

The drought has also affected Ukraine's ability to export corn, as Black Sea ports are virtually shut down due to the ongoing war with Russia. This reduction in supply is expected to increase demand for North American corn imports, particularly from the US and Canada. As of July 23, total U.S. corn export commitments to the EU stood at 7.628 mmt for the 2025-26 marketing year, which amounts to 41% of Europe's import requirements for the year.

The technical analysis suggests that the bottom has been left far behind, with significant upside potential remaining ahead. A saucer bottom formed from February 2025 until the eventual breakout at the start of July, and a bull pennant is being formed by the consolidation currently seen following the test of resistance at 263 euros in mid-July.