(Bloomberg) — Corn prices in Chicago plunged to seven-week lows as broken grain elevators and power outages at the US’s busiest agricultural port raised concerns about grain supplies having nowhere to go.
Hurricane Ida left more than 1 million homes and businesses without electricity in southern Louisiana and also closed export terminals in New Orleans. Food supply chains were already under severe strain during the pandemic, with shortages of everything from packaging to truck drivers.
The US is the world’s largest grain supplier and about two-thirds of grain and soy exports go through the ports surrounding the southern metropolis. If the disruptions continue, it could cause an oversupply just as growers in the Midwest Corn Belt start harvesting crops.
“Boats, barges, fleets are a mess and it will take some time to get the flow going again,” said Drew Moore of Advance Trading Inc. in a Farm Progress post Tuesday.
The largest US agricultural cooperative, CHS Inc., said it will divert ships from a closed terminal in Louisiana until September, with power not expected to be restored for another four weeks.
December corn futures in Chicago fell a whopping 3.2% to $5.2525 per bushel, the lowest level since mid-July. November’s soybeans also fell.
Weekly crop assessments from the US government on Monday showed that conditions for soybean and corn remained stable from the previous week.
Both commodities are on track to end August with a fourth straight month of losses amid uncertain demand prospects and a easing of weather-induced supply concerns. That is the longest streak in a year for maize and since 2014 for soy.
Wheat futures in Chicago fluctuated. Soybean oil fell for a second day, retreating as much as 3.4%.
Elsewhere, Canada, the world’s largest rapeseed grower, expects to harvest its smallest crop of oilseed in nine years after heat and drought reduced yields. Wheat production could hit its lowest point in 14 years.
US canola futures fell for the fourth straight day, by a staggering 1.3%.
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