Home etftrends.com Corn and Wheat Prices to Continue Rising in the Midst of Drought

Corn and Wheat Prices to Continue Rising in the Midst of Drought

Extreme heat and drought are impacting vital cash crops, including corn and wheat, with prices continuing to rise in the midst of shortage.

Farmers, already struggling to make ends meet from the pandemic-affected prices of last year, are now facing a harvest of crops that are in poor condition at best. The Wall Street Journal reported that 63% of U.S. spring wheat crops are in poor or very poor condition, compared to only 6% last year at the same time.

The record-setting drought in a large swath of the U.S. — namely North Dakota, South Dakota, Minnesota, Iowa, and Nebraska — has caused the USDA to revise its expectations for crop production this year. North Dakota and Minnesota have close to the lowest reported soil moisture on record according to the National Oceanic and Atmospheric Administration.

According to their latest supply and demand report, the USDA put final harvests for wheat, corn, and soybeans at the lowest they have been since 2013.

“The ingredients for a demand-led bull [market]are firmly in place as international markets rise,” said agricultural research firm AgResource Co. in a note this month.

It’s a trend that is being seen globally, with Brazil’s second corn harvest, grown during the wintertime, vastly reduced due to drought, and wheat crops in Russia also affected by drought.

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