Corn futures soared by the most since June after the United States Department of Agriculture delivered a bigger-than-anticipated reduction in the yield for America’s top crop .
Futures climbed by as much as 4.1 per cent in Chicago, before paring gains. Grain prices were already rising earlier Wednesday with an attack on a key Russian grain port adding to concerns that an escalating conflict between Ukraine and Russia will disrupt exports from the Black Sea region.
Heat waves across the Northern Hemisphere in recent months have been stressing grain fields , prompting analysts to cut back harvest estimates in the U.S. and across much of Europe.
The USDA estimated the U.S. corn yield at 180.7 bushels per acre, down from 183 last month and off sharply from last year’s record of 186.5. Still, production will rise slightly to 16.013 billion bushels, the second-biggest U.S. harvest ever as some states including top grower Iowa will have record yields, according to the agency’s monthly outlook.
The U.S. agency has been aiming to improve its analysis, including use of satellite imagery and their own field checks to supplement tens of thousands of surveys sent to farmers , who have been replying less often to those inquiries.
The USDA also raised its acreage forecast for corn. That marks a change from last season, when a major revision was made in January. That may help improve the standing of the forecast, after reports a year ago and in January sent corn prices crashing.
“This re-vamped survey methodology found more acres, earlier,” Bloomberg Intelligence analyst Alexis Maxwell said. “For a market still stung by last year’s multiple, late-in-season revisions, this report marks initial steps into revitalizing confidence with USDA forecasts.”
—With assistance from Dominic Carey.