3 Reasons Why Corn Prices Surged to a Two-Month High

Why did corn prices surge? Several bullish factors are at play, says Joe Vaclavik, president of Standard Grain. Those include:

1. Lower crop condition ratings.
As of Aug. 21, USDA estimates 55% of the U.S. corn crop is in good-to-excellent condition. That’s down two percentage points from last week and five percentage points from this time last year. “That’s the lowest rating in at least five years,”

2. Severe drought across the globe.
Severe droughts across the Northern Hemisphere — stretching from the farms of California to waterways in Europe and China — are further snarling supply chains and driving up the prices of food and energy, adding pressure to a global trade system already under stress, the Wall Street Journal reports. Parts of China are experiencing their longest sustained heat wave since record-keeping began in 1961, leading to manufacturing shutdowns owing to lack of hydropower.

Here’s a rundown of the 2022 Pro Farmer Crop Tour data:

South Dakota: Samples found an average corn yield of 118.45 bu. per acre in South Dakota, down sharply from both last year’s 151.45 bu. per acre estimate and the three-year Crop Tour average of 161.59 bu. per acre. Soybean pod counts in a 3’x3’ square came in at 871.40 for South Dakota, down from 996.86 in 2021 and 1,026.86 for the three-year average.

Ohio: Samples yielded an average corn yield of 174.17 bu. per acre, down from 185.06 bu. per acre in 2021 but up from the three-year average of 169.03 bu. per acre. Soybean pod counts in a 3’x3’ square totaled 1,131.64 for Ohio, down from 1,195.37 in 2021 and below the three-year average of 1,038.35.

Nebraska: Samples showed an average corn yield of 158.53 bu. per acre in Nebraska, down from both last year’s 182.35 bu. per acre estimate and the three-year Tour average of 176.68 bu. per acre. Soybean pod counts in a 3’x3’ square came in at 1,063.72 for Nebraska, down from both 1,226.43 in 2021 and the three-year Tour average of 1,245.06.

Indiana: Samples yielded an average corn yield of 177.85 bu. per acre, down from both 193.48 bu. per acre in 2021 and the three-year Tour average of 178.26 bu. per acre. Soybean pod counts in a 3’x3’ square totaled 1,165.97 for Indiana, down from 1,239.72 in 2021 but above the three-year average of 1,148,26. $Corn Futures(JUL4)(ZCmain.US)$ $Teucrium Commodity Trust Corn Fd Shs(CORN.US)$ $Mini-Corn Futures(JUL4)(XCmain.US)$ $S&P 500 Index(.SPX.US)$ $Dow Jones Industrial Average(.DJI.US)$ $Nasdaq Composite Index(.IXIC.US)$