Corn, Soy Slide Further as Storm Damage Hobbles U.S. Export Flow
(Bloomberg) -- Soybeans declined for a fifth day and corn prices fell to a seven-week low as U.S. exports face obstacles after a storm tore through the nation’s busiest agricultural port.
Hurricane Ida, which ripped through Louisiana over the weekend, has left behind broken grain elevators, widespread power outages and shuttered export terminals in New Orleans. With shipping stalled in a region that accounts for about two-thirds of U.S. grain and soy exports, there’s concern supply could get backed up as the harvest season looms.
Markets are also awaiting details on the crop outlook, and the U.S. Department of Agriculture is due to update production estimates in a monthly report next week. There’ll be particular focus on Iowa’s corn and soy output as the “swing state” dividing good and bad crop conditions in the Midwest.
“Fears of a slow restart to the export facilities in Louisiana, with talk that power could be out for weeks, helped to pressure the market,” The Hightower Report said in a note. “In addition, traders see the rains from August as beneficial to stabilize some of the crops in the northern and western sections of the corn belt.”
Corn futures fell as much as 3% to the lowest since July 12, while soybeans headed for a fifth straight loss, the longest slump since mid June. The oilseed dropped as much as 1.7% to $12.70 a bushel, the lowest since late June.
The Bloomberg Grains Spot Subindex capped a fourth straight monthly decline in August.
The storm damage is “substantial” and in some cases might take months to repair, according to Commonwealth Bank of Australia strategist Tobin Gorey. Given that the U.S. is the world’s top corn supplier, investor focus is now turning to whether companies can find temporary solutions to the stalled operations.
Demand is looking bearish as well. China’s record corn-buying spree may be running out of steam as domestic production is set to climb and local prices weaken, making imports less attractive. There are risks that purchases by the Asian nation will fall short of U.S. official estimates for the 2021-22 season.
Soy oil, soy meal, wheat and canola also fell in U.S. trading on Wednesday.
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