Grains Rebound With Fertilizer Price Surge Threatening Supply
(Bloomberg) -- Corn and wheat rebounded in Chicago as ripple effects from soaring fertilizer prices threatens to squeeze already tight grain supplies.
Higher crop-nutrient costs worldwide -- spurred by energy crises in Europe and China -- could cause farmers to switch from wheat to other less fertilizer-intensive plants, adding pressure on already tight stockpiles, Alex Sanfeliu, head of Cargill Inc.’s World Trading Group, told Bloomberg.
An even “bigger conversation” is the potential for farmers to shift from nitrogen-heavy corn to soybeans in next year’s U.S. growing season, Justin Gilpin, chief executive officer of the Kansas Wheat Commission, said an email.
Corn for December delivery rose 1.3% to $5.3925 a bushel as of 11:11 a.m. in Chicago, rebounding from a decline Tuesday. December benchmark soft winter wheat futures are on track to break a two-day losing streak, rising 1.3% to $7.14 a bushel.
In the nearer term, U.S. traders are poised to scrutinize a U.S. government report on quarterly grain inventories due midday Thursday. For corn, the expectation is for lower stocks than earlier forecast, while soybeans are likely to be little changed and wheat stockpiles are seen being slashed following severe drought in the northern Plains, according to Jacqueline Holland of Farm Futures.
Soybeans, soy oil and meal all edged up less than 1% after European rapeseed futures charged to a fresh record. The gain comes as global oilseed shortfalls combine with surging demand from reopening economies. Read more here.
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